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Atlanta, Georgia-based Rollins, Inc. (ROL) is a premier global consumer and commercial services company. Valued at $24.3 billion by market cap, the company provides essential pest and wildlife control services and protection against termite damage, rodents and insects to residential and commercial customers.
Shares of this global leader in route-based pest-control services have underperformed the broader market over the past year. ROL has gained 18.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 23.5%. However, in 2025, ROL stock is up 12%, surpassing the SPX’s 4% rise on a YTD basis.
Narrowing the focus, ROL’s underperformance is also apparent compared to the Consumer Discretionary Select Sector SPDR Fund (XLY). The exchange-traded fund has gained about 28.9% over the past year. However, ROL’s double-digit gains on a YTD basis outshine the ETF’s 1.2% returns over the same time frame.
ROL underperformed due to intense industry competition, labor shortages that increased costs and impacted service quality, and rising expenses that outpaced revenue growth, hindering profitability. The company's profitability metrics were challenged, with net income falling due to rising operational expenses, and operating margin decreasing, highlighting ongoing pressure on profitability amidst higher investments and market competitiveness.
On Feb. 12, ROL reported its Q4 results, and its shares closed up more than 3% in the following trading session. Its adjusted EPS of $0.23 matched Wall Street expectations. The company’s revenue was $832.2 million, beat Wall Street forecasts of $816.3 million.
For fiscal 2025, ending in December, analysts expect ROL’s EPS to grow 10.1% to $1.09 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 11 analysts covering ROL stock, the consensus is a “Moderate Buy.” That’s based on four “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
The configuration has been fairly stable over the past three months.
On Feb. 12, RBC Capital analyst Ashish Sabadra maintained a “Buy” rating on ROL with a price target of $52, implying a potential marginal upside from current levels.
While ROL currently trades above its mean price target of $51.10, the Street-high price target of $60 suggests an upside potential of 15.6%.
