Unveiling the Investment Potential of Rollins Inc (ROL): A Comprehensive Analysis of Financial ...
Rollins Inc (NYSE:ROL) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $35.04, Rollins Inc has witnessed a decline of 8% over a period, marked against a three-month change of -14.61%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Rollins Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Rollins Inc's GF Score components are as follows:
1. Financial strength rank: 7/10
2. Profitability rank: 10/10
3. Growth rank: 10/10
4. GF Value rank: 6/10
5. Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and growth rank, and a slightly lower GF Value rank, GuruFocus assigned Rollins Inc the GF Score of 98 out of 100, which signals the highest outperformance potential.
Understanding Rollins Inc Business
Rollins Inc, with a market cap of $17.27 billion and sales of $2.87 billion, is a global leader in route-based pest-control services. Its operations span North, Central and South America, Europe, the Middle East and Africa, and Australia. Its portfolio of pest-control brands includes the prominent Orkin brand, a market leader in the U.S., where it boasts near national coverage, and in Canada. Residential pest and termite prevention dominates the services provided by Rollins, owing to the group's ongoing focus on U.S. and Canadian markets. The company's operating margin stands at 18.67%.
Financial Strength Breakdown
According to the Financial Strength rating, Rollins Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Rollins Inc stands impressively at 83.2, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 11.11, Rollins Inc exhibits a strong defense against financial distress. With a favorable Debt-to-Revenue ratio of 0.22, Rollins Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Rollins Inc's impressive standing among its peers in generating profit. Rollins Inc Operating Margin has increased (7.67%) over the past five years. Furthermore, Rollins Inc's Gross Margin has seen a consistent rise over the past five years. This trend underscores the company's growing proficiency in transforming revenue into profit. Rollins Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Rollins Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 10.1%, which outperforms better than 73.47% of 98 companies in the Personal Services industry. Moreover, Rollins Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years.
Conclusion
Given the company's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights Rollins Inc's unparalleled position for potential outperformance. This analysis underscores the importance of comprehensive financial evaluation in making informed investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
