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 22th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 67.67%. In terms of the factors that were most noteworthy in this DCF analysis for ROL, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 98. Its equity weight surpasses that of 94.36% of free cash flow generating stocks in the Consumer Cyclical sector.
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately merely 9.32% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
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 49.12% 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 EAT, JW.A, DNKN, ELY, and FLWS.
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...