Rollins ROL
Industrials · Specialty Business Services · Synthos Deep Dive · 2026-07-03
The Overview
Rollins is the company behind Orkin and a family of pest-control brands — the folks who come spray your house or your restaurant for bugs, rodents, and termites. It's a boringly good business: customers pay every month or every quarter, year after year, so the revenue is sticky and recession-resistant. Bugs don't take a holiday.
The problem is price, not quality. The stock got very popular and very expensive, and it has fallen about a third from its high — but it still costs about 35 dollars for every 1 dollar of expected earnings, while those earnings are only growing about 10% a year. That's a lot to pay for steady-but-slow growth. Our verdict is Watch: a wonderful company we'd happily own at a fairer price, but not a screaming buy today.
Here's what our three scores mean in everyday terms:
- Downside Risk 5/10 (middle). The company itself is very safe — low debt, calm stock, dependable customers — but the price is high, so a disappointment can still hurt.
- Growth Quality 7/10 (good). A high-quality, dependable grower. Not explosive, but clean and durable.
- Exponential Potential 3/10 (low). Don't expect it to double fast. It grows a steady ~10% a year in a mature, slow-moving industry.
The one big worry: you're paying a premium price for modest growth, and that growth just slowed (organic sales grew only ~6.6% early this year). If growth or profit margins slip again, the expensive stock can keep sliding.
Putting a number on it: our fair-value estimate is $41 against a current price of $36.38 — real upside if our numbers are right.
Our summary metrics
Low beta (0.73), light leverage (1.1x net debt/EBITDA), recession-resistant recurring revenue — but 35x forward EPS on ~10% growth (PEG ~3.3) mid a sharp de-rating.
~10% forward EPS CAGR, 37% ROE, 21% ROIC, durable recurring-revenue moat — high quality, modest pace, margins recently pressured.
~10% growth and decelerating (organic slowed to 6.6% in Q1'26); mature slow-TAM pest market caps the multibagger even with roll-up optionality.
What does “fair value” mean?
Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.
The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Exponential Potential
~10% growth and decelerating (organic slowed to 6.6% in Q1'26); mature slow-TAM pest market caps the multibagger even with roll-up optionality.
What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.
Deeper analysis
Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.
Reference table
| Street consensus | $60 (high $70 / low $46; 8 Buy · 10 Hold · 0 Sell → "Hold") — context, not our anchor |
| Valuation | 40× trailing EPS · 35× FY26E · 31× FY27E · 25× FY30E · EV/S 5.7× · EV/EBITDA 25× · PEG ~3.3 |
| Technicals | Downtrend — $43.38, −34% off 52-wk high, below 50/200-DMA, RSI 29 (oversold), −23% 12-mo (SPY +21%) |
| Conviction | Low — 0 expert claims in KB; call rests entirely on fundamentals + quant |
| Position sizing | If owned, a small 1–3% quality-defensive sleeve — but no urgency to buy here |
What the experts actually said
No independent expert claims in the Synthos knowledge base yet for ROL — this dive is fundamentals- and technicals-driven, not panel-driven.
Price & moving averages 12 months · 50 & 200-day averages · 52-week range
Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.
Data summary: last close $36.38, 10% below the 50-day average ($40), 31% below the 200-day average ($53) — a downtrend. 45% below the 52-week high of $66, 1% above the 52-week low of $36.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Data summary: price $36.38 is currently inside the band (band $36–$38).
RSI (14) momentum gauge · 0–100
Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 38.
MACD 12 / 26 / 9 · trend & momentum
The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.
Data summary: MACD is currently above its signal line by 0.26, positive momentum.
Relative performance vs S&P 500 & its sector (XLI (sector)), set to 100 a year ago
Solid = ROL · dashed = S&P 500 · dotted = XLI (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
1. What it is
Rollins, Inc. (NYSE: ROL) is a ~$21B global pest and wildlife management company headquartered in Atlanta, founded 1948. Through Orkin and a family of brands (HomeTeam, Clark, Fox, Western, Northwest, Trutech/Critter Control, Orkin Canada/Australia, and more), it serves more than 2.8 million residential and commercial customers across North America, South America, Europe, Asia, Africa and Australia, with ~22,000 employees across 850+ locations. The model is recurring-service: routine pest control, termite protection, and wildlife removal on repeat contracts. Fiscal year ends December 31.
Revenue mix (FY2025, from filings):
- By service line: Residential contract $1,693M (45%) · Commercial contract $1,245M (33%) · Termite/ancillary + other ~$807M (21%) · Franchise $16M. (FMP re-bucketed termite into "other" in FY25; the residential/commercial split is the durable frame.)
- By geography: United States $3,491M (~93%) · Non-US $270M (~7%). The base is overwhelmingly domestic — a stability strength and a limited-international-runway limitation.
The business grows two ways: (1) organic — price plus new customers plus cross-sell — and (2) a steady tuck-in M&A roll-up of small local pest operators (e.g., the Saela and April 2026 Romex deals). Growth has been reliably high-single to low-double digit for years.
2. The expert thesis
There is no expert coverage of Rollins in the Synthos knowledge base — total_claims is 0, breadth 0, net conviction 0. No net-bullish or cautionary voices we track have made a traceable, dated claim on this name. That is an honest gap, not a hidden signal.
What that means for this note: the verdict is entirely fundamentals- and quant-driven. There are no claim_ids to cite because none exist in the file, and House Standard forbids inventing them. Everything below is built from the FMP financials, the analyst-estimate consensus, management's own SEC 8-K guidance (half-weighted, §9), and Synthos's own scoring — not from expert conviction. Read the conviction rating as Low for exactly this reason: a business this well-understood by the market simply has no differentiated expert edge in our panel.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
| Score | 0–10 | The read |
|---|---|---|
| Downside Risk (lower = safer) | 5 · Moderate | Beta 0.73, net-debt/EBITDA 1.1×, recession-resistant recurring revenue and a fortress operating model make the business very safe — but 35× FY26E on ~10% EPS growth (PEG ~3.3) is a rich price mid-de-rating, and the stock is already −34% from its high. |
| Growth Quality | 7 · High | ~10% forward EPS CAGR, 37% ROE, 21% ROIC, ~52% gross margin, sticky recurring revenue and a real roll-up moat — clean, durable compounding, just not fast, with margins slightly pressured (Q1'26 operating margin −120 bps YoY). |
| Exponential Potential | 3 · Low | ~10% growth that is decelerating (Q1'26 organic +6.6%), a mature slow-TAM pest market, and a $21B cap. Tuck-in M&A gives modest optionality but there is no exponential here. |
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. The cases bound the range; the scores above summarize them.
| Case | Key assumptions | Fair value |
|---|---|---|
| Bull | Peak-season demand reaccelerates, organic growth back toward 8%+, margins re-expand, M&A stays accretive. FY27E EPS beats to ~$1.45 (vs $1.38 cons); market re-pays a premium ~36× for the quality. | ~$52 (+20%) |
| Base (our anchor) | Estimates roughly hit — FY27E EPS $1.38; a durable ~10% compounder with recurring revenue earns a still-rich but saner ~30×. | ~$41 (−6%) |
| Bear | Organic growth keeps slowing, cost/insurance pressure compresses margins, and the market finishes de-rating a former darling. FY27E EPS ~$1.30; multiple compresses to ~22× (still a premium to the market). | ~$29 (−33%) |
Synthos fair value = the base case, ~$41 (−6%), with the full $29–$52 span as the honest range. Note our anchor sits well below the Street's $60 consensus: the sell-side is still valuing ROL near its historical premium multiple, whereas we think ~10% growth no longer supports 40×+. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating, multi-baggers-from-here). ROL is a high-quality compounder with essentially no exponential profile:
- Forward growth: revenue CAGR FY25→FY30E ~7.7% ($3.76B → $5.46B est); EPS CAGR ~10.0% ($1.09 → $1.756 est) as modest operating leverage and buyback help.
- Acceleration (2nd derivative) is negative. Revenue grew +11.0% (FY25) but management reported organic growth of only +6.6% in Q1'26 (10.2% total including M&A), and EPS growth flattens across the estimate strip (FY26E +13% → FY27E +12% → FY28E +10% → FY29E +11% → FY30E +4%). The trajectory is decelerating, not accelerating.
- Room to run: the U.S. pest-control market is large and fragmented, which supports the roll-up — but it is a mature, low-growth end market, and at 93% U.S. revenue the international runway is under-developed. A $21B cap in a slow-TAM category does not offer a fast multibagger.
- Reinvestment runway: capex is tiny (~$28M/yr, <1% of revenue — an asset-light service model), so growth reinvestment happens through M&A (~$310M FY25). Accretive, but incremental.
Exponential Potential: Low (3/10). Own ROL for dependable ~10% compounding and downside stability, not for a fast multibagger. A small, accelerating name with these returns on capital would score far higher; a mature, decelerating one does not.
5. Financials (real numbers — FMP annual/quarterly)
- Revenue: FY25 $3.76B, +11.0% (FY24 $3.39B, +10.3% on FY23 $3.07B). Steady low-double-digit top line, roughly two-thirds organic / one-third M&A.
- Quarterly trajectory: Q1'25 $823M → Q2 $1,000M → Q3 $1,026M → Q4 $913M → Q1'26 $906M (+10.2% YoY). Seasonal (peak season is Q2–Q3); the YoY comparison is the signal, and organic decelerated to +6.6% in Q1'26.
- Margins: gross 51.8% TTM, EBITDA 22.4% TTM, operating ~19.0%, net 13.8% TTM. Q1'26 operating margin slipped −120 bps YoY on insurance/claims and people-cost deleverage early in the quarter — a watch item, though management expects seasonal recovery.
- Earnings: net income $527M FY25 (+13% on FY24 $466M); EPS $1.09 vs $0.96. Q1'26 net income $108M, EPS $0.22 (flat YoY on GAAP; adjusted EPS +9% to $0.24).
- Cash flow: operating CF $678M, capex just −$28M, FCF $650M FY25 (+12%). Very high cash conversion (FCF ≈ 96% of operating CF) — the hallmark of the asset-light model. Q1'26 FCF fell 21% YoY, but management attributed it to timing of tax payments (~$40M) and a shift to semi-annual interest on the 2035 notes (~$9M), not a demand problem.
- Balance sheet: total debt ~$1.04B, net debt ~$938M, net-debt/EBITDA ~1.1× — comfortably investment-grade. Returns on capital are elite: ROE 37%, ROIC 21%, ROCE 31%. (Note current ratio 0.65 and negative tangible book — normal for a goodwill-heavy roll-up, not a red flag given the cash generation.)
6. Valuation — priced in or room?
This is the crux. ROL is unambiguously expensive even after a 34% drawdown: 40× trailing EPS, 5.7× sales, 25× EV/EBITDA, price/book 15×, and a forward PEG of ~3.3. The forward P/E strip is 35× (FY26E) → 31× (FY27E) → 25× (FY30E) — the multiple only compresses to a still-premium 25× five years out if estimates hit. FMP's own letter rating flags it: overall B+, but the price-to-earnings sub-score is 1/5 and price-to-book 1/5.
The bull's defense is legitimate — a recurring-revenue, low-beta, 37%-ROE compounder deserves a premium, and ROL has spent most of the last decade at 40×+. The bear's rebuttal is that ~10% EPS growth cannot indefinitely support 40× once growth decelerates, and that's exactly what the −34% de-rating is: the market repricing a former darling toward a saner multiple. A reverse read: at $43.38 the market is paying ~30× normalized forward earnings — reasonable for the quality, but not cheap, and with little margin for a growth or margin miss.
Street targets (context): consensus $60, high $70, low $46 — the sell-side still anchors near the historical premium. Our base FV of ~$41 is deliberately below consensus because we think the multiple has further to normalize toward the growth rate. Not a value buy; a wonderful-business-at-a-still-full-price hold.
7. Technicals (from the tech block)
- Trend: down. $43.38 sits below the 50-DMA ($49.82) and 200-DMA ($56.33), and the 50 is below the 200 — a death-cross posture. MACD −2.06 (negative).
- Location: −33.9% off the 52-week high ($65.60), only +3.9% off the 52-week low ($41.74) — near the bottom of its range, deep in a drawdown (max −34% from peak).
- Momentum: RSI(14) 28.7 — oversold (<30). A bounce is possible on mean reversion, but oversold in a downtrend is a falling-knife signal, not a green light.
- Relative strength (the tell): ROL −23.4% 12-mo vs SPY +20.6% and QQQ +30.3%; −18.9% 3-mo vs SPY +13.7%. Persistent, broad underperformance — the market is actively de-rating this name.
- Read: technicals do not confirm a buy. Oversold RSI may set up a tactical bounce, but the primary trend is down and the stock is underperforming both the market and the Nasdaq badly. No technical urgency to step in; a base above the 50-DMA would be the confirmation to watch for.
8. Moat & competitive position
Rollins's moat is a genuine one for a services business: (1) density and route economics — the more customers per zip code, the lower the cost-to-serve, a real local-scale advantage; (2) brand trust — Orkin is a household name in a category where people don't shop hard on price; (3) recurring contracts with high retention and pricing power (pest control is non-discretionary and a small line item for customers); and (4) a repeatable M&A roll-up engine consolidating thousands of mom-and-pop operators. Returns on capital (37% ROE, 21% ROIC) confirm the moat is real.
Peer set (from FMP — note the tags are loose): FMP's "peers" list is a grab-bag of consumer-cyclical names by market cap (Expedia $31B, Lennar $22B, PulteGroup $25B, Ulta $20B, Williams-Sonoma $27B, Tractor Supply $17B, Stellantis, Geely, Viking) — none are true pest-control comps. The real competitive frame is the pest-control oligopoly: Rentokil (RTO) — the global #1 after buying Terminix — and Terminix/private regional operators. ROL is the highest-return, cleanest-balance-sheet operator in that true peer set, which is precisely why it has carried a premium multiple.
9. Management, capital allocation & guidance
- Capital allocation: disciplined and shareholder-friendly — a ~1.6% dividend (payout ~63% of earnings, FY25 dividends $328M), opportunistic buyback ($217M FY25), and steady tuck-in M&A ($310M FY25) funded by compounding FCF on a light balance sheet. Appropriate for a high-ROIC roll-up.
- Insider activity: the sampled Form 4s are routine — director equity awards (April 2026), an accounting-officer award/tax-withholding, and two gifts by the CEO (Gahlhoff) and Executive Chairman (Wilson) in late April. No cluster of alarming open-market discretionary selling; nothing that changes the thesis.
- Management's own guidance (half-weighted — their self-interested words): Rollins does not issue precise numeric revenue/EPS guidance, but the Q1'26 earnings release (SEC 8-K, filed 2026-04-22) is a real earnings release with forward commentary. Management framed the quarter as a "strong acceleration of demand during March," noting they "exited the quarter with approximately 12 percent total growth and over 8 percent organic growth in March," and said they "anticipate improving profitability in our underlying operations as we enter peak season," while attributing soft Q1 cash flow to tax-payment timing (~$40M) and a semi-annual interest shift (~$9M) rather than demand. CFO Krause pointed to a "balanced capital allocation program enabled by compounding cash flow and a strong balance sheet." Weight this at half — it is management talking its own book — but the March exit-rate and peak-season margin-recovery framing are the specific claims to verify against the Q2 print.
10. Catalysts & what to watch
- Next earnings: 2026-07-22 (Q2'26; Street EPS $0.34, revenue ~$1.09B). Q2 is peak season — the single most important read on whether the March re-acceleration held.
- Organic growth rate: did organic re-accelerate from Q1's +6.6% toward the +8% March exit-rate management flagged? This is the key valuation driver.
- Operating margin: did the −120 bps Q1 margin pressure (insurance/claims, people-cost deleverage) reverse into peak season as management guided?
- M&A cadence: integration and accretion of Saela, Romex (April 2026) and future tuck-ins.
- Multiple normalization: whether the de-rating stabilizes — a base forming above the 50-DMA (~$50) would be the technical tell that the reset is complete.
Thesis tripwires (what would change the call): organic growth falling below mid-single digits; a second consecutive quarter of YoY margin compression; FCF conversion deteriorating structurally (not just timing); or — on the upside — the stock building a base with organic growth reaccelerating, which would move this from Watch toward Buy.
11. Key risks
- Valuation / de-rating (the main risk): 35× forward on ~10% growth (PEG ~3.3) leaves no margin for error; the −34% drawdown may not be finished if growth stays soft.
- Decelerating organic growth: Q1'26 organic +6.6% is below the historical run-rate; if the mature end market keeps slowing, the premium multiple is unsupportable.
- Margin pressure: insurance/claims and labor costs squeezed Q1'26 operating margin −120 bps YoY — a cost-inflation risk in a labor-intensive service model.
- M&A dependence: roughly a third of growth is acquired; a slower deal pipeline or overpaying would hit both growth and returns; goodwill/intangibles are 62% of assets.
- Concentration / limited international runway: 93% U.S. revenue is stable but caps the geographic growth optionality.
- No expert edge: with 0 KB claims, there is no differentiated conviction cushioning this call — it lives or dies on the fundamentals and the multiple.
12. Verdict, position sizing & monitoring
Watch. Rollins is a genuinely excellent business — recurring revenue, 37% ROE, light debt, low beta, a real density-and-brand moat, and a proven roll-up engine. The problem is arithmetic, not quality: even after a 34% drawdown it trades at ~35× forward earnings for ~10% EPS growth that just decelerated, and the technicals (below both moving averages, RSI oversold in a downtrend, −23% vs a +21% market) say the market is still repricing it. Our base-case fair value (~$41) sits below both the current price and the Street's $60 consensus — the price still needs to catch down to the business.
- Sizing: if already owned, hold as a small 1–3% quality-defensive sleeve. For new money, there is no urgency — wait for either a saner multiple (high-20s forward P/E) or evidence organic growth has re-accelerated. This is a name to buy on quality when the price is right, and today it isn't quite.
- Monitoring: the 2026-07-22 peak-season print is the key data point — watch organic growth and operating margin against management's March exit-rate and margin-recovery claims. Formal re-score each earnings print.
- Single biggest risk: the valuation air-pocket — paying up for modest, decelerating growth means any miss re-rates the stock further.
Why not "Buy"? The business would justify it; the price does not yet. Why not "Avoid"? The quality, balance sheet, and cash generation are too good, and the de-rating has already removed much of the excess — a Watch that converts to Buy on a better entry is the honest call.
Provenance & disclosures
- Traceability: 0 KB claims, breadth 0 — there is no expert coverage of ROL in the Synthos knowledge base. No
claim_ids are cited because none exist; fabricating conviction is structurally forbidden. The verdict is fundamentals- and quant-driven. - Data as-of: fundamentals 2026-03-31 (Q1'26) · estimates & prices 2026-07-02/03 · management guidance from SEC 8-K filed 2026-04-22. Forward figures are analyst consensus (FMP) or Synthos scenarios, labeled as estimates.
- Management caveat: the §9 guidance is management's own earnings-release language, half-weighted by design.
- Peer-list caveat: FMP's peer tags for ROL are consumer-cyclical-by-market-cap, not true pest-control comps; the real comp is Rentokil/Terminix (noted in §8).
- Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
- Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").