revenue growth
0.07–0.08 pct
FY 2026
management framework
ROLLINS, INC.
Last · NYSE$32.63+0.48 (+1.49%)close · yahoo · 8h ago
Market cap$15.70B481.1M sh
P/E · TTM29.7fwd 25.4 · eps 1.10
Beta0.73vs S&P 500
Div yield2.27%annual · TTM
52w range
$29.29$66.14
Volume4.8Msession
| Revenue | $2.0B |
|---|---|
| Operating income | $346.8M |
| Net income | $251.7M |
| Free cash flow | $277.3M |
| Operating margin | 17.5% |
| Net margin | 12.7% |
| Return on equity | 17.6% |
| Period | 2026 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
High-quality growth remains intact, but margin expansion is still an opportunity rather than a demonstrated earnings catalyst.
Hold: Rollins still offers an attractive compounder profile, with 6.5%–7% organic growth through the first four months, a 7%–8% medium-term organic-growth framework, 2%–3% M&A growth, recurring revenue at roughly 75% of sales, and substantial free-cash-flow conversion. The key tension is execution: incremental margins are currently closer to 25%, with management only framing 30%–35% as a future objective and acknowledging that commercial investments and procurement savings will take time.
Themes
- Organic Growth
- Incremental Margins
- Commercial Expansion
- Ancillary Services
- Ai Search
- Technician Retention
Near term
Monitor whether organic growth reaches the 7%–8% framework after a difficult January; management reported 6.5%–7% growth through the first four months.
Incremental margins are expected at roughly 25%–30% in 2026, below the 30%–35% medium-term framework.
Commercial sales-force productivity should improve after a six-to-nine-month ramp, but the payoff from recent investment is not yet fully visible.
RAC in-house financing, with RAC sales reportedly up 70%, could support residential conversion and ancillary-service adoption.
AI-driven search may reduce website traffic while improving conversion rates; performance-marketing-heavy brands remain more exposed to channel changes.
Longer term
The business has multiple growth levers beyond market growth: CPI-plus pricing, low household penetration, recurring services, commercial expansion, ancillary offerings and M&A.
Ancillary services are currently about $300 million, or roughly 10% of revenue, with management targeting continued double-digit growth and broader rollout beyond Orkin.
Commercial customers can have lives exceeding 10 years, while branch splitting and shared facilities offer potentially high returns on capital with limited physical investment.
Technician-retention improvement could generate $15 million–$20 million of annual savings, or roughly 30–40 basis points of margin benefit; procurement offers another 15–25 basis points.
The multi-brand model is becoming more collaborative, with cross-brand lead sharing, financing and operating practices potentially reducing churn and improving customer lifetime value.
AI, unified data, routing, call-center automation and technician tools could reduce future overhead growth, but the financial contribution remains largely unquantified.
Red flags
Management explicitly reframed the 60–80 basis points of gross-margin opportunity as upside rather than an annual commitment; the analyst pushback exposed the risk of treating it as embedded guidance.
The 30%–35% incremental-margin target has not yet been achieved, and management deferred the expected improvement largely to 2027 as commercial investments mature.
Management cited substantial potential savings in turnover, procurement, fleet, SG&A and AI, but provided limited timing or implementation milestones.
Performance marketing is vulnerable to AI-driven search changes, while claims and insurance costs were identified as an area that has struggled.
M&A growth has exceeded the 2%–3% framework recently, but continued acquisition-led growth increases integration and organizational-bandwidth risk.
Forward outlook
revenue growth
0.02–0.03 pct
FY 2026
management framework
operating margin
0.25–0.3 pct
FY 2026
management framework
operating margin
0.3–0.35 pct
FY 2027
management framework
Recommendation history
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
Upcoming earnings
9:00 PM UTC+1
Period
Sep 2026
Est. EPS
$0.35
Est. revenue
1.1B
Earnings transcripts
- Issuer IR
Transcript PDF
ROLLINS, INC.
- Issuer webcastVideo
J.P. Morgan Annual U.S. All Stars Conference
ROLLINS, INC.
- Issuer webcast
2nd Quarter 2026 Earnings Webcast
ROLLINS, INC.
- Issuer webcast
2nd Quarter 2026 Earnings Webcast
ROLLINS, INC.
- Issuer webcast
View 2nd Quarter 2026 Earnings Webcast presentation
ROLLINS, INC.
- Issuer webcast
Earnings Webcast Q2 2026 Audio
ROLLINS, INC.
Documents
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