Rollins Inc. reaffirmed its medium-term targets for 10%+ revenue growth and 30-35% incremental EBITDA margins during its NYC investor day. Goldman Sachs reiterated its Buy rating, citing the company's durable compounding potential across residential, commercial, and termite segments.
Key Takeaways
- 1.Rollins reiterated its medium-term financial targets of ~7-8% organic revenue growth and ~10%+ total revenue growth, supported by CPI-plus pricing and M&A.
- 2.Management expects EBITDA margins to expand via a 30-35% incremental margin framework, driven by scale, efficiency, and favorable mix shift.
- 3.The residential segment provides steady growth via pricing and cross-selling, while the commercial and termite segments offer higher growth opportunities due to low penetration and larger ticket sizes.
Table of Contents
- Reiterated medium-term algorithm targets double-digit revenue, earnings and FCF growth
- Key Data
- GS Forecast
- GS Factor Profile
- Ratios & Valuation
- Growth & Margins (%)
- Price Performance
- Balance Sheet ($ mn)
- Income Statement ($ mn)
- Cash Flow ($ mn)
- Exhibit 1: Healthy Medium-Term Organic Revenue Growth and Margin Expansion
- Valuation and Risks
- Exhibit 2: ROL Earnings Model
- Exhibit 3: ROL Segment Drivers
- Exhibit 4: ROL Balance Sheet
- Exhibit S: ROL Cash Flow Statement
- Disclosure Appendix
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Authors
George K. TongAlex LakritzAnna WuSami Nasir, CFA
Securities
ROL
Themes
Durable Compounding GrowthM&A Integration and FragmentationMargin Expansion and Efficiency
Regions
North AmericaUnited States