Rollins Inc.
ROL
$35.86
+0.42%
Rollins, Inc. is a global leader in route-based pest control services, operating primarily in the United States and across North, Central, and South America, Europe, the Middle East, Africa, and Australia. Its portfolio of pest-control brands includes the prominent Orkin brand, a market leader in the US and Canada, with near-national coverage, and it also reaches customers through alternative sales channels via other brands. The company is currently under investor scrutiny due to a significant decline in its stock price, down over 36% in the past year, amid concerns about growth sustainability and margin pressures, despite its historical reputation as a stable, recession-resistant business. Recent analyst actions have been mixed, with some downgrades and a consensus 'hold' rating, reflecting uncertainty about the company's near-term prospects.…
ROL
Rollins Inc.
$35.86
Investment Opinion: Should I buy ROL Today?
Based on the analysis, I rate Rollins as a Hold. The company has a solid business with strong cash generation and a defensive profile, but the stock is facing headwinds from decelerating growth and margin pressures. The consensus analyst rating is 'hold' with an average target price of $45.59, implying 27.1% upside, but the recent price action suggests the market is not convinced.
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ROL 12-Month Price Forecast
The AI assessment is neutral, reflecting the balanced risk-reward. The stock has fallen significantly, but valuation remains high on trailing earnings, and growth is decelerating. The forward PE suggests the market expects a strong earnings rebound, which is uncertain. If the company delivers on earnings estimates, the stock could appreciate, but if not, further downside is possible. I would upgrade to bullish if margins stabilize and growth reaccelerates, and downgrade to bearish if margins continue to compress.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Rollins Inc.'s 12-month outlook, with a consensus price target around $45.59 and implied upside of +27.1% versus the current price.
Average Target
$45.59
0 analysts
Implied Upside
+27.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$32 - $66
Analyst target range
Rollins is covered by 17 analysts, with a consensus recommendation of 'hold' and a mean recommendation score of 2.53 (where 1 is strong buy and 5 is sell). The average target price is $45.59, which implies an upside of approximately 27.1% from the current price of $35.86. The distribution of ratings is not provided, but the 'hold' consensus suggests a neutral stance. The target price range is from a low of $32.00 to a high of $66.00, with the high target implying a 84% upside, likely assuming a recovery to previous valuation levels, while the low target suggests a further 10.8% downside, possibly pricing in continued operational challenges. Recent analyst actions have been mixed, with some downgrades (e.g., Bernstein downgraded from Outperform to Market Perform in May 2026) and some reaffirmations (e.g., Morgan Stanley Overweight in July 2026), indicating uncertainty about the company's future performance. The wide spread between the low and high targets reflects high uncertainty, and the recent downgrades suggest that sentiment is not strongly bullish.
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Bulls vs Bears: ROL Investment Factors
Rollins presents a mixed picture: it has a resilient business with strong cash generation and a defensive profile, but the stock has been hammered due to decelerating growth and margin pressures. The bear case is currently stronger given the persistent downtrend and high valuation multiples, but the forward PE suggests the market expects a significant earnings rebound. The key tension is whether the growth deceleration is temporary or a sign of structural challenges; if growth reaccelerates, the stock could recover, but if margins continue to compress, further downside is likely.
Bullish
- Resilient Revenue Growth: Q1 2026 revenue grew 10.2% YoY to $906.4M, up from $822.5M in Q1 2025, demonstrating continued demand for pest control services despite economic uncertainty. This growth is supported by the company's recurring route-based model and strong brand portfolio including Orkin.
- High Profitability and Cash Generation: Gross margin remains robust at 50.85% in Q1 2026, and the company generated $111.2M in free cash flow in the quarter, with $621.1M in trailing twelve-month FCF. ROE is an impressive 38.3%, reflecting efficient capital use and a strong competitive position.
- Attractive Forward Valuation: The forward PE of 27.6x is significantly lower than the trailing PE of 55.1x, implying the market expects substantial earnings growth. Analysts estimate EPS of $1.67 for the next fiscal year, which would represent a major increase from the current run-rate, making the stock look cheaper on a forward basis.
- Analyst Target Upside: The average analyst target price is $45.59, implying a 27.1% upside from the current price of $35.86. Even the low target of $32.00 is only 10.8% below the current price, suggesting limited downside risk according to analysts.
Bearish
- Severe Stock Price Decline: The stock has fallen 36.9% over the past year, significantly underperforming the S&P 500 by 55.6 percentage points. It is currently trading near its 52-week low of $35.25, reflecting deep investor pessimism and a persistent downtrend.
- Margin Compression: Operating margin declined to 16.05% in Q1 2026 from 17.34% in Q1 2025, and net margin fell to 11.90% from 12.80%. This suggests rising costs or pricing pressure, which could erode profitability if the trend continues.
- High Valuation Multiples: Despite the price decline, the trailing PE of 55.1x and PS ratio of 7.7x are well above industry averages. The PB ratio of 21.1x is extremely high, indicating the market still prices in significant growth, leaving little room for error.
- Decelerating Growth: Revenue growth slowed to 10.2% YoY in Q1 2026 from 24.7% YoY in Q3 2025, indicating a sharp deceleration. This slowdown may signal maturing markets or increased competition, challenging the high-growth expectations embedded in the valuation.
ROL Technical Analysis
Rollins' stock is in a pronounced downtrend, with a 1-year price change of -36.93%, and the current price of $35.86 sits near the bottom of its 52-week range, at approximately 2% above the 52-week low of $35.25 and 46% below the 52-week high of $66.14. This positioning near the lows suggests a bearish sentiment, but also potential value opportunity if the decline is overdone; however, the sustained downtrend indicates that sellers remain in control. The stock has underperformed the S&P 500 dramatically, with a relative strength of -55.58% over the past year, and its beta of 0.736 indicates it is less volatile than the market, but the persistent decline is notable for a defensive stock.
Beta
0.74
0.74x market volatility
Max Drawdown
-45.6%
Largest decline past year
52-Week Range
$35-$66
Price range past year
Annual Return
-36.9%
Cumulative gain past year
| Period | ROL Return | S&P 500 |
|---|---|---|
| 1m | -4.6% | -0.4% |
| 3m | -23.9% | +4.5% |
| 6m | -38.5% | +13.9% |
| 1y | -36.9% | +19.0% |
| ytd | -39.2% | +12.9% |
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ROL Fundamental Analysis
Rollins' revenue growth has been solid, with the most recent quarter (Q1 2026) showing revenue of $906.4 million, a 10.2% year-over-year increase, and the company has consistently grown revenue over the past several quarters, from $822.5 million in Q1 2025 to $906.4 million in Q1 2026. However, growth has decelerated from the 24.7% YoY growth seen in Q3 2025, indicating a slowdown. The company's profitability remains robust, with a gross margin of 50.85% in Q1 2026, up from 51.35% in Q1 2025, and a net margin of 11.90%, which is slightly lower than the 12.80% in Q1 2025, but still healthy. Operating income for Q1 2026 was $145.5 million, with an operating margin of 16.05%, down from 17.34% in the year-ago quarter, suggesting some margin compression. The company's balance sheet shows a debt-to-equity ratio of 0.755, which is moderate, and it generated $118.4 million in operating cash flow and $111.2 million in free cash flow in Q1 2026, indicating strong cash generation. However, the current ratio of 0.60 suggests potential liquidity concerns, and the company's ROE of 38.32% is high, reflecting efficient use of equity.
Quarterly Revenue
$906424000.0B
2026-03
Revenue YoY Growth
+10.2%
YoY Comparison
Gross Margin
50.8%
Latest Quarter
Free Cash Flow
$621138000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ROL Overvalued?
Given that Rollins has positive net income, the PE ratio is the primary valuation metric. The trailing PE is 55.06x, while the forward PE is 27.57x, indicating that the market expects significant earnings growth, as the forward PE is much lower. This gap suggests that analysts anticipate a substantial increase in earnings, which is supported by the estimated EPS of $1.67 for the next fiscal year, up from the current EPS of $0.22 in the latest quarter. Compared to the industry average, Rollins trades at a premium, with a PS ratio of 7.73x, which is higher than the specialty business services sector average of approximately 2.5x, and a PB ratio of 21.14x, far above the industry norm. This premium reflects the company's strong brand and market position, but it also implies high expectations. Historically, Rollins' PE ratio has ranged from around 35x to 65x over the past few years, and the current trailing PE of 55x is near the higher end of that range, suggesting that the stock is not cheap relative to its own history, even after the recent decline.
PE
55.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 36x~66x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
35.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a moderate debt-to-equity ratio of 0.755, which is manageable but could become problematic if interest rates rise. The current ratio of 0.60 is a red flag, indicating potential liquidity strain, though strong operating cash flow of $118.4M in Q1 2026 mitigates this. Margin compression is evident, with operating margin down from 17.34% to 16.05% YoY, and if this trend continues, it could pressure earnings and the stock's valuation. Additionally, the high payout ratio of 62.3% suggests limited retained earnings for growth, though the dividend yield is low at 1.13%.
