Rollins Inc (ROL.N): Leading US pest control franchise with a proven track record

Research evidence excerpt

Rollins Inc (ROL.N): Leading US pest control franchise with a proven track record

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15 Jul 2026 00:00:52 ET │ 31 pages

Rollins Inc (ROL.N)

Leading US pest control franchise with a proven track record

CITI'S TAKE

Rollins is a leading US pest operator. The business is attractive as it’s route-

based, operationally dense, supported by a large stream of recurring

revenue (75%). We forecast 7% LFL revenue growth and 9% EBITA CAGR. Neutral

The stock is valued as a high-quality compounder on the back of its 20+ yr Price (14 Jul 26 10:04) US$44.60track-record of solid LFL growth, strong cash conversion and attractive

runway for small-scale M&A. We initiate coverage with a Neutral rating, Target price US$46.00

given its premium valuation and near-term growth challenges. Expected share price return 3.1%

Expected dividend yield 1.6%

Core debate — Rollins is guiding to FY26 7-8% LFL revenue growth plus 25-30% Expected total return 4.7%incremental EBITDA margins. However, during Q1 Rollins grew at 6.6%, below their

target range, and subsequently management have talked cautiously about Q2 Market Cap US$21,473M

trading. Their Q1 EBITA margin was also weaker than expected, due to higher

insurance / claims costs and higher staffing levels. The core debate now is whether

Rollins can sustain superior revenue growth whilst successfully managing cost and

FTC regulatory pressures. These concerns have weighed on Rollins’ share price Price Performance

performance, with the stock trading towards the bottom of its 52-week range. (RIC: ROL.N, BB: ROL US)

Growth — This is the most important near-term share price driver. Pre-pandemic

Rollins averaged LFL revenue growth of c4.5% pa. Some 3 years ago they made an

intentional change where they moved to a CPI+ pricing model to reflect pest