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Why Is Rollins (ROL) Down 5.8% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Rollins (ROL). Shares have lost about 5.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Rollins due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Rollins' Earnings Miss Estimates in Q1

Rollins reported lower-than-expected first-quarter 2019 results.

Earnings of 14 cents per share missed the Zacks Consensus Estimate by a penny and declined by a penny year over year. The bottom line was negatively impacted by a higher tax rate, strengthening U.S. dollar against foreign currency and professional services expenses associated with buyouts and enhanced employee benefit participation.

Revenues of $429 million missed the consensus mark by $2 million but improved 5% year over year. Weather conditions weighed on the company’s top line as arctic weather and torrential rains caused termites and other pests to remain dormant for the quarter.

Income before income taxes of $56.1 million decreased 5.3% year over year. Net income of $44.2 million declined 8.9%.

Rollins exited the first quarter with cash and cash equivalent balance of $116.6 million compared with $115.5 million in the prior quarter.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

Currently, Rollins has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Rollins has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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