Rollins has gotten torched over the last six months - since December 2025, its stock price has dropped 25.8% to a new 52-week low of $45.00 per share. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.
Following the drawdown, is now a good time to buy ROL? Find out in our full research report, it’s free.
Why Is Rollins a Good Business?
Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE: ROL) provides pest and wildlife control services to residential and commercial customers.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Rollins’s sales grew at an impressive 11.7% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.
2. Elite Gross Margin Powers Best-In-Class Business Model
Cost of sales for an industrials business is usually comprised of the direct labor, raw materials, and supplies needed to offer a product or service. These costs can be impacted by inflation and supply chain dynamics.
Rollins has best-in-class unit economics for an industrials company, enabling it to invest in areas such as research and development. Its margin also signals it sells differentiated products, not commodities. As you can see below, it averaged an elite 52.2% gross margin over the last five years. That means Rollins only paid its suppliers $47.76 for every $100 in revenue.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Rollins has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company’s free cash flow margin was among the best in the industrials sector, averaging 16.1% over the last five years.
Final Judgment
These are just a few reasons Rollins is a high-quality business worth owning. After the recent drawdown, the stock trades at 35.1× forward P/E (or $45.00 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
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