Stock of the Day

January 7, 2020

Rollins (ROL)

$33.68
-$0.21 (-0.6%)
Market Cap: $16.15B

About Rollins

Rollins, Inc., through its subsidiaries, provides pest and wildlife control services to residential and commercial customers in the United States and internationally. The company offers pest control services to residential properties protecting from common pests, including rodents, insects, and wildlife. It also provides workplace pest control solutions for customers across various end markets, such as healthcare, foodservice, and logistics. In addition, the company offers termite protection services and ancillary services. It serves clients directly, as well as through franchisee operations. The company was formerly known as Rollins Broadcasting, Inc and changed its name to Rollins, Inc. in 1965. Rollins, Inc. was founded in 1901 and is headquartered in Atlanta, Georgia.

Rollins Bull Case

Here are some ways that investors could benefit from investing in Rollins, Inc.:

  • The stock is currently trading at $32.61, which is significantly below the consensus price target of $45.94 set by analysts, suggesting substantial potential for price appreciation if the company meets its earnings expectations.
  • Rollins, Inc. offers a dividend yield of 2.27%, providing a steady income stream for investors, with a recent quarterly dividend of $0.1825 per share paid in September 2026.
  • The company demonstrated strong revenue growth in the most recent quarter, with revenue up 7.9% year-over-year to $1.08 billion, indicating a resilient business model that can drive top-line expansion.
  • Rollins, Inc. maintains a low beta of 0.73, meaning the stock is less volatile than the overall market, which can be attractive to investors seeking stability in their portfolio.
  • The company has a strong return on equity of 38.81% and a net margin of 13.55%, reflecting efficient use of shareholder capital and solid profitability in its pest control services.

Rollins Bear Case

Investors should be bearish about investing in Rollins, Inc. for these reasons:

  • The stock has experienced a significant decline from its 52-week high of $66.14 to its current price of $32.61, indicating a bearish trend and potential loss of investor confidence.
  • Rollins, Inc. missed its earnings expectations in the last reported quarter, with actual EPS of $0.32 falling short of the consensus estimate of $0.34, which may signal underlying operational challenges.
  • Analyst sentiment has shifted negatively, with the consensus rating downgraded to "Hold" and multiple price targets lowered, such as JPMorgan Chase & Co. cutting its target from $40.00 to $35.00.
  • The company's current ratio of 0.63 and quick ratio of 0.58 are below 1.0, suggesting potential liquidity issues and an inability to cover short-term liabilities with current assets.
  • Short interest has increased, with the percentage of float shorted rising to 6.04% in the most recent period, indicating that a growing number of investors are betting against the stock's performance.

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