Rollins Inc. provides pest and termite control services to residential and commercial customers in the United States, Canada, Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, Africa, and Mexico. The company was founded in 1948 and is based in Atlanta, Georgia.
ROL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for ROL, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Rollins Inc ranked in the 24th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 65.17%. As for the metrics that stood out in our discounted cash flow analysis of Rollins Inc, consider:
The company's balance sheet shows it gets 98% of its capital from equity, and 2% of its capital from debt. Notably, its equity weight is greater than 94.71% of US equities in the Consumer Cyclical sector yielding a positive free cash flow.
The business' balance sheet suggests that 2% of the company's capital is sourced from debt; this is greater than merely 8.93% of the free cash flow producing stocks we're observing.
ROL's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 49.25% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as ROL, try SSP, BXG, FWONA, LB, and LEVI.
When screening for companies, that might have a wide economic moat around its business, Rollins Inc. (ROL) is one of the companies that came up as it has a very stable gross margin and extremely high return on invested capital over the years. Additionally, we see stable revenue and earnings...
Daniel Schönberger on Seeking Alpha | August 25, 2020
Rollins (NYSE:ROL) is scheduled to announce Q2 earnings results on Wednesday, July 29th, before market open.The consensus EPS Estimate is $0.18 (-14.3% Y/Y) and the consensus Revenue Estimate is $542.03M (+3.4% Y/Y).Over the last 2 years, ROL has beaten EPS estimates 50% of the time and has beaten revenue estimates...