Rollins, Inc. ROL stock has gained 16.2% in the past year, outperforming the 15.6% rally of the industry while underperforming the Zacks S&P 500 composite’s 26.4% rise.

One Year Price Performance

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ROL reported mixed third-quarter 2024 results. Adjusted earnings of 29 cents per share missed the consensus estimate by 3.3% but increased 3.6% year over year. Revenues of $916.3 million beat the consensus mark by a slight margin and improved 9% year over year. Organic revenues of $898.9 million increased 7.7% year over year. Rollins’ performance in the quarter was positively impacted by a healthy demand environment for its services.

How is ROL Doing?

Strong construction activity is driving the demand for this leading pest and termite control services provider. In 2023, the top line increased 14% year over year, with all its business lines — residential, commercial and termite — registering growth. Revenues are expected to grow 9.5%, 6.6% and 7.6% in 2024, 2025 and 2026, respectively.

Rollins’ operating platform increases cross-selling opportunities and cost efficiency and facilitates fast customer service delivery. ROL’s real-time service tracking and customer internet communication technologies have improved its competitive position. Its proprietary Branch Operating Support System facilitates service tracking and payment processing for technicians, and provides virtual route management tools to improve route efficiency across the network, resulting in lowering costs and increasing customer retention through quick response service.

Rollins believes in returning capital through dividends. It paid out dividends of $208.7 million, $211.6 million and $264.3 million in 2021, 2022 and 2023, respectively. Consistent dividend payments underscore the company's commitment to shareholders and underline its business confidence.

In 2021, ROL completed 39 acquisitions, and in 2022 and 2023, the company closed 31 and 24 deals, respectively. Acquisitions play important roles in Rollins’ business development and are assisting the company to expand its global brand recognition and geographical reach, along with improving its revenues.

Meanwhile, frequent buyouts and IT-related expenses are resulting in increasing ROL’s costs. Lawsuits, claims or arbitrations that allege its services caused damage weigh on Rollins’ subsidiaries, adding to costs. As a result, operating expenses increased 11.1% year over year in 2022 and 13.1% in 2023. We anticipate the metric to rise 8.7% year over year in 2024. Increments as such might put the bottom line under pressure.

Rollins’ current ratio (a measure of liquidity) at the end of the third quarter was pegged at 0.78, lower than the industry's 0.91. The current ratio declined from the year-ago quarter's 0.82. A current ratio of less than 1 hints at inefficient short-term debt coverage capability.

ROL’s Zacks Ranks & Other Stocks to Consider

Rollins carries a Zacks Rank #3 (Hold) at present.

Palantir Technologies, Inc. PLTR and Qifu Technology, Inc. QFIN are the stocks that investors should look at.

Palantir Technologies flaunts a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PLTR has a long-term earnings growth expectation of 36.1%. It delivered a trailing four-quarter earnings surprise of 5.9%, on average.

Qifu Technology has a long-term earnings growth expectation of 20.9%. The company currently sports a Zacks Rank of 1.

QFIN delivered a trailing four-quarter earnings surprise of 12.4%, on average.

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