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Atlanta, Georgia-based Rollins, Inc. (ROL) provides pest and wildlife control services to residential and commercial customers in the United States and internationally. Commanding a market cap of $24.9 billion, Rollins offers pest control services to residential properties, protecting from common pests, including rodents, insects, and wildlife.
Companies worth $10 billion or more are generally described as "large-cap stocks," Rollins fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the consumer discretionary sector.
Rollins touched its all-time high of $51.90 on Sept. 17 before slightly pulling back. ROL has gained 1% over the past three months, lagging behind iShares US Consumer Discretionary ETF’s (IYC) 5.6% gains during the same time frame.
Over the longer time frame, Rollins has substantially outperformed IYC. ROL gained 31.5% over the past 52 weeks and 15.1% in 2024, outpacing IYC’s 22.2% gains over the past year and 12.8% returns on a YTD basis.
To confirm the bullish trend, ROL has consistently traded above its 200-day moving average since mid-November 2023 and mostly above its 50-day moving average since late October 2023 with some fluctuations.
Despite reporting impressive Q2 earnings, shares of Rollins dipped 6.5% after its earnings release on Jul. 24. The company reported a robust 8.7% year-over-year revenue growth to $891.9 million. Its net income grew by 17.5%, totaling $129.4 million. The company also saw a 1.1% net margin expansion to 14.5%. However, the company saw a 1.6% decline in operating cash flows, falling to $145.2 million, and a 3% decline in free cash flow, falling to $136.4 million, which might have raised concerns among the investors.
Rollins’ competitor, Rentokil Initial plc (RTO), has underperformed ROL over the past year. RTO declined 34.5% over the past year and 15.4% in 2024.
Among the nine analysts covering the ROL stock, the consensus rating is a “Moderate Buy.” Although ROL is trading above its mean price target of $49.75, the Street-high target of $54 represents a potential upside of 7.5% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
