Rollins (ROL:NYS) Fundamental Valuation Report

Rollins (ROL:NYS) Fundamental Valuation Report

Fundamental Valuation Report


Consumer Cyclical:Personal Services

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Close Price/Date
$35.29 (USD) 04/06/2021

Weighted Valuation
$34.00 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 3.7%

Valuation Models Adjusted Book Value: $28.65 (USD)
Multiples: $30.79 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation
According to Analyst consensus at $34.00 this stock is Fairly valued

Company Overview (ROL:NYS USD)

Price 35.29
Range 35.01 – 35.70
52 week 23.91 – 42.19
Open 35.36
Vol / Avg. 850256/1.57M
Mkt cap 17.14B
P/E 65.72
Div/yield 0.33/0.01
EPS 0.53
Shares 492.13M
Beta 0.49

Company Description

Rollins Inc is a provider of pest and termite control services. Rollins offers pest control services and protection against termite damage, rodents, and insects to homes and businesses, including hotels, food service establishments, food manufacturers, retailers, and transportation companies. The company and its wholly-owned subsidiaries offer their services to residential and commercial customers in North America and Australia. In Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, Africa, and Mexico, the company operates a franchise system.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for ROL:NYS

Using a discounted cash flow model we generated an intrinsic value of $13.94 (USD) for ROL:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

ROL:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $13.94 1% 5% 1% 5%
WACC (or Ke) 4.41 $18.00 $11.37
Terminal Growth Rate 0.00 $11.58 $17.67
Tax Rate 0.27 $14.94 $12.93
Cash Flow 433,706,300 $13.20 $14.67
Capital Expenditures 0 $13.94 $13.94
Long Term Debt 0 $13.94 $13.94

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $44.42 (USD) for ROL:NYS. We also generated a valuation of $20.75 (USD) using other metrics and comparables.
The comparable companies were Frontdoor (FTDR:NAS), Bright Horizons Family (BFAM:NYS), Service Corp Intl (SCI:NYS), Terminix Global Hldgs (TMX:NYS) and H&R Block (HRB:NYS).

Company ROL:NYS End Date Value
Earnings/Share $0.53 (USD)
Book Value/Share $1.91 (USD)
Sales/Share $4.40 (USD)
Cash Flow/Share $0.89 (USD)
EBITDA/Share $0.92 (USD)
Price Based on Comps Adjustment Factor (%)
$88.50 (USD) 28.8
$10.11 (USD) 0.0
$15.60 (USD) 88.1
$19.55 (USD) 68.8
$27.14 (USD) 30.2
66.58 PE Ratio 166.99 41.84 396.20 18.19 325.00 53.71
18.45 PB Ratio 5.28 0.00 8.44 5.06 2.35 0.00
8.03 PS Ratio 3.55 3.18 7.10 2.67 3.31 1.49
39.81 PCF Ratio 23.01 22.64 51.31 11.66 0.00 6.45
39.23 EV to EBITDA 29.59 21.10 74.42 12.44 27.28 12.73


Using a multiples approach we generated a valuation of  $30.79 (USD) for ROL:NYS

Company ROL:NYS End Date Value
Earnings/Share $0.53 (USD)
Book Value/Share $1.91 (USD)
Sales/Share $4.40 (USD)
Cash Flow/Share $0.89 (USD)
EBITDA/Share $0.92 (USD)
Price Based on Comps Adjustment Factor
$30.00 (USD) 0
$30.85 (USD) 0
$27.89 (USD) 0
$36.19 (USD) 0
$29.03 (USD) 0
Ratios Ratio Average
PE Ratio 56.60
PB Ratio 16.13
PS Ratio 6.34
PCF Ratio 40.82
EV to EBITDA 31.65

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ROL:NYS for the last 10 years was  14.96

We ran the Adjusted Book Value for  ROL:NYS and generated a book value of  $1.91 (USD)
By multiplying these we get an adjusted valuation of  $28.65 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for ROL:NYS. The 1 analysts have a concensus valuation for ROL:NYS for 2021 of $34.00 (USD).

ROL:NYS Rollins

No analyst recommendation
Current Price: not available

No analyst consensus

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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