As of June 7, 2025, Rollins Inc has a Discounted Cash Flow (DCF) derived fair value of $68.23 per share. With the current market price at $57.77, this represents a potential upside of 18.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $51.84 |
| DCF Fair Value (10-year) | $68.23 |
| Potential Upside (5-year) | -10.3% |
| Potential Upside (10-year) | 18.1% |
| Discount Rate (WACC) | 6.0% - 8.6% |
Revenue is projected to grow from $3389 million in 12-2024 to $7479 million by 12-2034, representing a compound annual growth rate of approximately 8.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 3389 | 10% |
| 12-2025 | 3725 | 10% |
| 12-2026 | 4019 | 8% |
| 12-2027 | 4403 | 10% |
| 12-2028 | 4725 | 7% |
| 12-2029 | 5187 | 10% |
| 12-2030 | 5625 | 8% |
| 12-2031 | 6017 | 7% |
| 12-2032 | 6507 | 8% |
| 12-2033 | 6996 | 8% |
| 12-2034 | 7479 | 7% |
Net profit margin is expected to improve from 14% in 12-2024 to 23% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 466 | 14% |
| 12-2025 | 577 | 15% |
| 12-2026 | 689 | 17% |
| 12-2027 | 825 | 19% |
| 12-2028 | 956 | 20% |
| 12-2029 | 1123 | 22% |
| 12-2030 | 1233 | 22% |
| 12-2031 | 1335 | 22% |
| 12-2032 | 1461 | 22% |
| 12-2033 | 1589 | 23% |
| 12-2034 | 1719 | 23% |
with a 5-year average of $28 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 31 |
| 12-2026 | 34 |
| 12-2027 | 37 |
| 12-2028 | 41 |
| 12-2029 | 46 |
| 12-2030 | 50 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 21 |
| Days Inventory | 9 |
| Days Payables | 12 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 632 | 153 | 29 | 11 | 439 |
| 2026 | 1000 | 243 | 42 | 17 | 697 |
| 2027 | 1189 | 291 | 46 | 23 | 829 |
| 2028 | 1373 | 338 | 49 | 17 | 969 |
| 2029 | 1608 | 397 | 54 | 26 | 1131 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 51.84 | -10.3% |
| 10-Year DCF (Growth) | 68.23 | 18.1% |
| 5-Year DCF (EBITDA) | 23.63 | -59.1% |
| 10-Year DCF (EBITDA) | 35.34 | -38.8% |
Is Rollins Inc (ROL) a buy or a sell? Rollins Inc is definitely a buy. Based on our DCF analysis, Rollins Inc (ROL) appears to be moderately undervalued with upside potential of 18.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $57.77.