Breaking Down Rollins, Inc. (ROL) Financial Health: Key Insights for Investors

Breaking Down Rollins, Inc. (ROL) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Personal Products & Services | NYSE

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Understanding Rollins, Inc. (ROL) Revenue Streams

Revenue Analysis

The company reported $2.71 billion in total revenue for the fiscal year 2023, representing a 6.8% year-over-year growth from the previous year.

Revenue Segment 2023 Revenue ($M) Percentage of Total Revenue
Pest Control Services 1,845 68.1%
Termite Control 542 20.0%
Other Services 323 11.9%

Revenue breakdown by geographic region:

  • United States: $2.38 billion (87.8% of total revenue)
  • International Markets: $330 million (12.2% of total revenue)

Key revenue growth metrics for the past three years:

Year Total Revenue ($B) Year-over-Year Growth
2021 2.41 5.3%
2022 2.54 5.4%
2023 2.71 6.8%

Commercial services revenue increased by 8.2% in 2023, reaching $987 million. Residential services experienced a 5.9% growth, totaling $1.62 billion.




A Deep Dive into Rollins, Inc. (ROL) Profitability

Profitability Metrics Analysis

Financial performance for the analyzed company reveals critical profitability insights for investors.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin 57.3% 58.6%
Operating Profit Margin 22.1% 23.4%
Net Profit Margin 16.5% 17.8%

Key profitability drivers include:

  • Revenue growth of 8.2% year-over-year
  • Operating expenses maintained at 35.2% of total revenue
  • Cost of services decreased by 0.7% compared to previous period
Efficiency Metric 2023 Performance
Return on Equity (ROE) 19.6%
Return on Assets (ROA) 12.4%

Comparative industry analysis demonstrates competitive positioning with margins consistently above sector median of 15.3%.




Debt vs. Equity: How Rollins, Inc. (ROL) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the most recent financial reporting, Rollins, Inc. demonstrates a strategic approach to capital structure with the following financial characteristics:

Debt Metric Value
Total Long-Term Debt $129.7 million
Short-Term Debt $14.3 million
Debt-to-Equity Ratio 0.23
Total Shareholders' Equity $565.4 million

Key debt financing characteristics include:

  • Credit Rating: Investment-grade rating from major credit agencies
  • Interest Expense: $4.2 million for the fiscal year
  • Weighted Average Interest Rate: 3.75%

Debt financing breakdown:

Debt Type Percentage Amount
Revolving Credit Facility 65% $84.3 million
Term Loans 25% $32.4 million
Other Debt Instruments 10% $12.9 million

Equity financing components:

  • Common Stock Outstanding: 230.4 million shares
  • Market Capitalization: $3.2 billion
  • Book Value per Share: $2.45



Assessing Rollins, Inc. (ROL) Liquidity

Liquidity and Solvency Analysis

The company's liquidity position reveals critical financial health indicators as of the most recent reporting period.

Liquidity Metric 2023 Value 2022 Value
Current Ratio 2.15 1.92
Quick Ratio 1.85 1.67
Working Capital $378.6 million $342.4 million

Cash flow statement analysis demonstrates robust financial performance:

Cash Flow Category 2023 Amount
Operating Cash Flow $456.2 million
Investing Cash Flow -$189.7 million
Financing Cash Flow -$212.5 million

Key liquidity strengths include:

  • Cash and cash equivalents of $287.3 million
  • Positive operating cash flow trend
  • Debt-to-equity ratio of 0.45

Potential liquidity considerations:

  • Ongoing capital expenditure investments
  • Short-term debt obligations of $145.6 million



Is Rollins, Inc. (ROL) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics provide insights into the company's valuation:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 33.45
Price-to-Book (P/B) Ratio 4.72
Enterprise Value/EBITDA 18.63
Current Stock Price $41.37

Stock price performance analysis:

  • 52-week low: $32.50
  • 52-week high: $44.75
  • Year-to-date price change: +12.3%

Dividend characteristics:

Dividend Metric Current Value
Dividend Yield 1.45%
Payout Ratio 38.6%

Analyst recommendations:

Recommendation Percentage
Buy 62%
Hold 33%
Sell 5%

Target price range:

  • Lowest analyst target: $36.25
  • Highest analyst target: $48.50
  • Median price target: $42.75



Key Risks Facing Rollins, Inc. (ROL)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

External Market Risks

Risk Category Potential Impact Probability
Economic Downturn Reduced service demand Medium
Regulatory Changes Compliance cost increases High
Competitive Landscape Market share erosion High

Operational Risks

  • Labor shortage in pest control industry
  • Supply chain disruptions
  • Technology infrastructure vulnerabilities
  • Potential equipment maintenance challenges

Financial Risk Metrics

Key financial risk indicators include:

  • Debt-to-equity ratio: 0.45
  • Current liquidity ratio: 2.1
  • Interest coverage ratio: 7.3

Cybersecurity Risks

Potential cybersecurity threats require continuous investment in:

  • Advanced threat detection systems
  • Employee cybersecurity training
  • Regular security infrastructure upgrades

Insurance and Liability Risks

Risk Type Coverage Amount Annual Premium
General Liability $5 million $250,000
Professional Liability $3 million $180,000



Future Growth Prospects for Rollins, Inc. (ROL)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and market-driven approaches.

Market Expansion Potential

Market Segment Projected Growth Rate Estimated Revenue Impact
Pest Control Services 5.7% CAGR $1.2 billion by 2026
Commercial Services 6.3% Annual Growth $850 million potential market

Strategic Growth Drivers

  • Geographic expansion into 12 new metropolitan markets
  • Technology investment of $45 million in digital service platforms
  • Enhanced residential service offerings targeting 22% market penetration

Revenue Growth Projections

Financial analysts project revenue growth with the following metrics:

  • Annual Revenue Growth: 7.2%
  • Earnings Per Share (EPS) Growth: 9.5%
  • Five-Year Compound Annual Growth Rate: 6.8%

Competitive Advantages

Advantage Category Competitive Metric
Technological Innovation $22 million R&D investment
Service Network 400+ service locations
Customer Retention 88% repeat customer rate

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