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Rollins (ROL)
NYSE:ROL
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Rollins
(NYSE:ROL)
Rating:78Outperform
Price Target:―
Positive Factors
Acquisitions
Rollins' acquisition of Saela Holdings expands its Western footprint and adds significant revenue potential.
Earnings
Strong Q1 suggests pest control is a great business in this market.
Financial Performance
Revenue of $823 million was above the consensus estimate, indicating strong performance.
Negative Factors
EBITDA
EBITDA was weaker than expected.
Margins
Targeted 30% incremental margins were deemed not achievable once again in Q1.
Revenue Growth
Organic revenue growth was 7.4%, below the estimate for 8.1%.
Rollins (ROL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$27.56B
Dividend Yield1.11%
Average Volume (3M)2.06M
Price to Earnings (P/E)57.7
Beta (1Y)0.51
Revenue Growth9.46%
EPS Growth9.04%
CountryUS
Employees20,000
SectorConsumer Cyclical
Sector Strength76
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)0.22
Shares Outstanding484,646,450
10 Day Avg. Volume2,025,212
30 Day Avg. Volume2,055,143
Financial Highlights & Ratios
PEG Ratio27.92
Price to Book (P/B)20.27
Price to Sales (P/S)0.00
P/FCF Ratio45.82
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue2.10
Enterprise Value/Gross Profit15.69
Enterprise Value/Ebitda9.15
Forecast
1Y Price Target
$57.17Price Target Upside0.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Rollins Business Overview & Revenue Model
Company DescriptionRollins, Inc. (ROL) is a global consumer and commercial services company, primarily engaged in providing pest and termite control services. Headquartered in Atlanta, Georgia, Rollins operates through its various subsidiaries, including Orkin, HomeTeam Pest Defense, and Western Pest Services, among others. The company is recognized for its expertise in pest management solutions and offers a comprehensive range of services to both residential and commercial clients across multiple regions.
How the Company Makes MoneyRollins generates revenue primarily through its pest and termite control services offered to residential and commercial customers. The company's key revenue streams include recurring service contracts and one-time treatments for pest management. Rollins benefits from a stable revenue model due to the nature of pest control services, which often require ongoing maintenance and preventive measures. Additionally, Rollins leverages its extensive network of subsidiaries and franchise operations to expand its market reach and service offerings. The company also invests in technology and research to enhance service efficiency and customer satisfaction, further contributing to its financial performance. Strategic acquisitions and partnerships with local service providers enhance Rollins' capabilities and market presence, driving additional revenue growth.
Rollins Financial Statement Overview
Summary
Rollins shows strong financial performance with robust revenue and profit growth, supported by efficient cash generation and a solid balance sheet. However, increasing debt levels need careful management.Income Statement
Rollins exhibits strong revenue and profit growth over the years, with a consistent upward trajectory. The gross profit margin and net profit margin are robust, reflecting operational efficiency. The revenue growth rate from 2024 to the TTM period is healthy. EBIT and EBITDA margins are stable, indicating solid profitability.85
Very Positive
Balance Sheet
The company's balance sheet shows a healthy equity ratio, indicating a strong capital structure. The debt-to-equity ratio is moderate, suggesting manageable leverage levels. Return on equity is commendable, reflecting effective use of shareholder funds. However, total debt has increased, which could pose potential risks if not managed carefully.78
Positive
Cash Flow
Rollins demonstrates a solid cash flow position with strong free cash flow growth. The operating cash flow to net income ratio indicates efficient cash generation from operations. The free cash flow to net income ratio is strong, highlighting effective cash management. Consistent free cash flow growth supports ongoing financial stability.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.46B | 3.39B | 3.07B | 2.70B | 2.42B | 2.16B | Gross Profit |
| 1.80B | 1.79B | 1.60B | 1.39B | 1.26B | 1.11B | EBIT |
| 667.45M | 657.22M | 583.23M | 493.39M | 439.99M | 361.40M | EBITDA |
| 783.59M | 771.13M | 705.06M | 584.71M | 534.19M | 449.73M | Net Income Common Stockholders |
| 477.23M | 466.38M | 434.96M | 368.60M | 356.56M | 266.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 122.37M | 89.63M | 103.83M | 95.35M | 105.30M | 98.48M | Total Assets |
| 2.66B | 2.82B | 2.60B | 2.12B | 1.98B | 1.85B | Total Debt |
| 854.92M | 812.53M | 816.35M | 336.33M | 402.76M | 417.14M | Net Debt |
| 741.95M | 722.90M | 712.52M | 240.98M | 297.46M | 318.67M | Total Liabilities |
| 1.49B | 1.49B | 1.44B | 854.83M | 897.38M | 904.54M | Stockholders Equity |
| 1.17B | 1.33B | 1.16B | 1.27B | 1.08B | 941.36M |
| Cash Flow | Free Cash Flow | ||||
| 599.93M | 580.08M | 495.90M | 435.30M | 374.61M | 412.56M | Operating Cash Flow |
| 627.11M | 607.65M | 528.37M | 465.93M | 401.81M | 435.79M | Investing Cash Flow |
| -156.33M | -176.23M | -372.89M | -134.14M | -98.97M | -162.40M | Financing Cash Flow |
| -381.07M | -440.71M | -149.42M | -336.02M | -290.16M | -281.27M |
Rollins Technical Analysis
Positive
56.87
Price Trends
54.65
Positive
51.96
Positive
50.44
Positive
Market Momentum
0.63
Positive
57.28
Neutral
75.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROL, the sentiment is Positive. The current price of 56.87 is above the 20-day moving average (MA) of 56.45, above the 50-day MA of 54.65, and above the 200-day MA of 50.44, indicating a bullish trend. The MACD of 0.63 indicates Positive momentum. The RSI at 57.28 is Neutral, neither overbought nor oversold. The STOCH value of 75.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROL.
Rollins Risk Analysis
Rollins disclosed 1 risk factors in its most recent earnings report. Rollins reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rollins Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Performance Comparison
ROL
Rollins
56.87
11.29
24.77%
FTDR
frontdoor
53.53
18.55
53.03%
EJH
E-Home Household Service Holdings
0.10
-5.65
-98.26%
Rollins Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 3.83%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
Rollins demonstrated strong financial performance with notable revenue and margin improvements. The acquisition of Saela Pest Control is expected to contribute significantly to future growth. Despite some increased costs and the impact of one fewer business day, the overall financial health and strategic growth initiatives position the company positively.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Rollins delivered total revenue growth of 9.9% year-over-year, with organic growth at 7.4% despite headwinds from foreign currency and one less business day.
Gross Margin Improvement
The company achieved its highest first-quarter gross margin in recent history at 51.4%, up 20 basis points from the previous year.
Acquisition of Saela Pest Control
Rollins announced the acquisition of Saela Pest Control, expected to add $45 million to $50 million in revenue for 2025 and be accretive to earnings in the first full year.
Increased Cash Flow
Rollins reported operating cash flow of $147 million and free cash flow of $140 million, up 15% and 17% respectively, compared to last year.
Commercial Segment Growth
The commercial pest control segment experienced a revenue increase of 10.2% with nearly 10% recurring organic growth.
Negative Updates
Increased SG&A Costs
SG&A costs as a percentage of revenue increased by 70 basis points due to higher selling and advertising expenses.
Higher Fleet Expenses
The company faced higher fleet expenses, which somewhat offset the improvements in other cost categories.
Impact of One Less Business Day
The quarter's performance was impacted by one fewer business day, affecting revenue generation especially in one-time services.
Company Guidance
During the Rollins, Inc. First Quarter 2025 Earnings Conference Call, the company provided guidance indicating strong growth and strategic investments for continued expansion. Rollins reported a total revenue growth of 9.9% year-over-year, with organic growth at 7.4%, despite facing a 40 basis point headwind from foreign currency and one less business day in the quarter. The company's gross margin reached 51.4%, marking the highest first-quarter gross margin in recent history. Rollins' commercial pest control sector showed double-digit growth, with recurring revenue in the Orkin Commercial division nearing 10%. The recently acquired Saela Pest Control is expected to contribute $45 million to $50 million in revenue in 2025, enhancing Rollins' multi-brand strategy. Additionally, Rollins anticipates organic growth to remain in the 7% to 8% range for the year, with M&A activities expected to add 3% to 4% to growth. The company also highlighted its robust cash flow performance, with operating cash flow at $147 million and free cash flow increasing by 17% to $140 million. Looking ahead, Rollins plans to maintain its strategic investments to support long-term growth while leveraging operational efficiencies to improve margins.Rollins Corporate Events
Executive/Board ChangesShareholder Meetings
Rollins Elects Directors at 2025 Annual Meeting
Neutral
Apr 24, 2025
On April 22, 2025, Rollins held its 2025 Annual Meeting of Shareholders where key decisions were made to shape its future governance and financial oversight. Shareholders elected five director nominees to serve until the 2026 Annual Meeting and ratified Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, indicating continued confidence in the company’s leadership and financial management.
Executive/Board Changes
Rollins Announces Resignation of Chief Accounting Officer
Neutral
Feb 28, 2025
On February 26, 2025, Traci Hornfeck announced her resignation as Chief Accounting Officer of Rollins, Inc., effective March 11, 2025, to pursue another opportunity. Her departure is not due to any disagreements with the company. Kenneth D. Krause, currently the Executive Vice President and Chief Financial Officer, will take over as the principal accounting officer, with no new material agreements or transactions resulting from this change.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.