Leading pest control provider Rollins is outperforming in a tough market. The company boasts it is "recession resistant" as more than 80% of its revenues are recurring. So Rollins stock is Monday's pick for IBD 50 Growth Stocks To Watch from Investor's Business Daily as shares hit a record high Thursday and are in a buy zone.
Rollins' brands include Orkin, Clark Control and Critter Control. Its provides termite and insect control, and rodent and wildlife removal. It has 2.8 million commercial and residential customers in more than 70 countries. Rollins serves 20% of the commercial pest control market in North America. Rollins reported the highest termite activity remains in Miami, Los Angeles and Tampa for the third straight year.
The IBD 50 stock holds the top spot out of 13 names in the Building-Maintenance & Services group. The group, however has dropped to No. 179 out of the 197 industry groups IBD tracks.
How To Know It's Time To Sell Your Favorite Stock
Rollins Stock In A Buy Zone
Rollins stock is in a buy zone up to 54.77 of an early-stage cup base with a 52.16 buy point on its weekly chart, according to MarketSurge pattern recognition.
But the market is in a correction and investors should follow risk management rules, including cutting losses at 7%. Be sure to read the daily IBD Big Picture column for current market analysis.
Its relative strength line vs. the S&P 500 has climbed sharply from January lows. The line's rise comes as Rollins stock has gained around 15% so far this year while the S&P 500 has lost more than 5%.
In addition, its 1.3 up/down volume ratio shows positive demand for the pest control stock over the last 50 days.
Pest Control Name Shows Steady Profit Growth
On Feb. 12, Rollins reported in-line profit and higher sales for the fourth quarter than analysts had projected. Earnings and revenue each grew 10%. Its fourth-quarter gross profit margin increased to 51.3% from 50.9%.
Management is continuing to focus on acquisitions, pricing and modernization.
"As we look to 2025, demand for our services is solid and our pipeline for acquisitions is robust," Rollins Chief Executive Jerry Gahlhoff said in the earnings release.
Sales forecasts call for 9% growth over each of the next four quarters. And its 3-year sales growth rate is 12%, according to IBD Stock Checkup. Meanwhile, full-year 2025 profit projections show a second straight year of 11% growth with 12% in 2026.
The company has been a steady profit grower as seen in its Earnings Stability factor of 4 out of 99 possible — with a lower number being better.
Lastly, it holds an 87 Composite Rating.
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