ROL Stock Study (6-22-26)

Posted by Mark on August 6, 2026 at 07:46 | Last modified: June 22, 2026 08:15

I recently did a stock study on Rollins, Inc. (ROL, $44.96).

M* writes:

     > Rollins is a global leader in route-based pest control services,
     > with operations 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. It also has a portfolio of other
     > brands, which it uses to reach customers through alternative
     > sales channels. Residential pest and termite prevention
     > accounts for the majority of Rollins’ services, reflecting its
     > ongoing focus on the US and Canadian markets.

Over the past decade, this medium-size company grows sales and earnings at annualized rates of 10.4% and 14.6%. Lines are mostly up, straight, and parallel except for a YOY EPS decline in ’19. Value Line (VL) gives an Earnings Predictability score of 90. Shares outstanding decrease 1.4% (0.2%/year).

Over the past decade, PTPM leads peer and industry averages while ranging from 13.0% in ’19 to 19.6% in ’21 with a last-5-year mean of 18.8%. ROE leads peer and industry averages while ranging from 25.1% in ’19 to 39.0% in ’23 with a last-5-year mean of 34.2% (shareholder equity consistently positive with 10.3% CAGR). Debt-to-capital is less than peer and industry averages despite increasing from zero to 43.0% (’25) with a last-5-year mean of 34.1%.

Quick ratio is 0.47 and interest coverage 23.1 per M* who assigns “Wide” Economic Moat, gives “Exemplary” rating for Capital Allocation, and an A grade for Financial Health (per BI website). VL gives a B++ grade for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 9.7% and 8.8% for ’26 and ’27 (based on 16 analysts).
• Zacks gives YOY ACE 10.1% and 9.2% for ’26 and ’27 (6 analysts).
• VL projects 6.3% per year from ’25-’30.
• CFRA projects 9.5% YOY and 9.0% per year for ’26 and ’25-’27, respectively.
• M* gives 2-year ACE of 8.9% per year and projects 8.8% in its Equity Report.

My 6.0% per year forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 11.5% and 11.0% per year for ’25-’27 and ’25-’28, respectively (based on 21 analysts).
• Nasdaq.com gives ACE 11.1% and 10.7% per year for ’26-’28 and ’26-’29 [8 / 2 / 1 analyst(s) for ’26 / ’28 / ’29].
• Seeking Alpha projects 4-year CAGR of 12.5%.
• Finviz gives 5-year annualized ACE of 11.8% (7).
• Argus projects 5-year CAGR of 11.0%.
• LSEG has LTG at 13.1%.
• YF gives YOY ACE 11.2% and 12.0% for ’26 and ’27, respectively (17).
• Zacks gives YOY ACE 10.7% and 12.1% for ’26 and ’27 along with 5-year annualized growth of 13.1% (8).
• VL projects 8.7% per year from ’25-’30.
• CFRA projects 12.5% YOY and 12.6% per year for ’26 and ’25-’27 along with 3-year CAGR of 10.0%.
• M* gives long-term ACE of 11.1%/year and projects 11.0% from ’25-’30 in Equity Report.

My 8.0% forecast is below the long-term-estimate range (mean of eight: 11.5%). Initial value is ’25 EPS of $1.09/share.

My Forecast High P/E is 50.0. Over the past 10 years, high P/E ranges from 44.5 in ’16 to 81.1 in ’20 with last-5-year mean of 55.6 and a last-5-year-mean average P/E of 48.0. I am near bottom of the range (only ’16 is less).

My Forecast Low P/E is 30.0. Over the past 10 years, low P/E ranges from 30.8 in ’16 to 50.6 in ’19 with a last-5-year mean of 40.4. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $32.70 is default based on initial value from above: 27.3% less than previous close and 26.4% less than the 52-week low.

Over the past 10 years, Payout Ratio (PR) ranges from 57.3% in ’22 to 75.7% in ’19 with a last-5-year mean of 60.7%. I am forecasting below the range at 57.0%.

These inputs land ROL in the HOLD zone with a U/D ratio of 2.9. Total Annualized Return (TAR) is 13.4%.

PAR (using Forecast Average—not High—P/E) of 8.7% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on 64 studies done in the past 90 days (29 outliers including my study excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 8.8%, 10.6%, 52.1, 39.8, and 59.9%, respectively. I am lower across the board. VL projects a future average P/E of 45.0 that is less than MS (46.0) and greater than mine (40.0).

MS high / low EPS are $1.81 / $1.08 versus my $1.60 / $1.09 (per share). My high EPS is less due to a lower growth rate. VL (M*) high EPS of $1.70 ($1.84) is in the middle (greater than both).

MS LSPF of $42.10 implies a Forecast Low P/E of 39.0: less than the above-stated 39.8. MS LSPF is 2.1% less than the default $1.08/share * 39.8 = $42.98 resulting in more conservative zoning. MS LSPF is 28.8% greater than mine, though.

MOS is robust in the study because my inputs are near or below most historical/analyst/MS averages/ranges. MS TAR exceeding mine by 1.1% per year (per BI website†) and my substantially lower LSPF support the assessment.

With regard to valuation, PEG is 2.8 and 4.8 per Zacks and my projected P/E: quite overvalued (M* has 3.4 for ’25). Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 0.9. “Quick and Dirty” free cash flow method has stock undervalued by 41% (factoring in capex, which is debatable). M* reports stock at an 11% discount.

Per U/D, ROL is a BUY under $44/share. Given a forecast high price $80, [80.0 / ((13.77 / 100 ) +1 ) ^ 5] ~ $42 would meet the BetterInvesting® TAR criterion.

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† — I think this is wrong. Google AI reports CAGR difference (excluding dividend) is 3.6%.

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