Value
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.0 |
| P/S | 6.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.7 |
| PEG | 3.6 |
| Analyst target | 7.5 |
- ▸Forward P/E: 31.5x
- ▸PEG: 3.22
ROL · Why this verdict
Why Rollins (ROL) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Rollins is a pest control services company with a wide economic moat, 39% return on equity, and 34% analyst upside to consensus targets, currently in a technical downtrend with RSI near oversold territory that may represent an accumulation opportunity for investors who believe the moat is intact.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
RSI has fallen to 26, which is in oversold territory, the stock is below its 200-day moving average with a slope of -1.6% per month, and on-balance volume has been flat, indicating technical capitulation that historically precedes mean reversion in high-quality companies with durable moats. Momentum breakdown | RSI recovers above 40 within 3 months and price begins to approach the 200-day moving average from below, signaling that the selling pressure has exhausted itself. | →Stable |
| CounterAn RSI of 26 and a death cross in a defensive services company can persist for 6 to 12 months when driven by multiple compression in a rising-rate environment rather than company-specific deterioration. | ||
Analyst consensus implies 34% upside from the current $46.90 to the target of $56.64, reflecting the view that the current price does not adequately compensate for the quality and durability of Rollins' business model relative to its trading history. Sentiment breakdown | Price recovers to above $54 within 12 months as the technical downtrend reverses and the market re-rates the business toward historical valuation multiples. | Tripped↓Deteriorating |
| CounterAnalyst targets for mature consumer services businesses are frequently anchored to historical valuation multiples that may not be achievable in a higher interest rate environment where defensive yield alternatives compete for capital. | ||
Rollins earns a 39% return on equity with a wide economic moat rating of 8.2 out of 10 and a Piotroski F-Score of 8 out of 9, reflecting the recurring-revenue nature of pest control contracts and a national route density advantage that is difficult for smaller operators to replicate. Quality breakdown | Return on equity remains above 32% over the next four quarters as route density improvements in recently acquired territories drive margin expansion. | →Stable |
| CounterA forward price-to-earnings multiple of 33.6 times and a PEG ratio of 3.38 mean Rollins is priced at a significant premium to its growth rate, leaving little room for error in an industry where growth is typically steady but not spectacular. | ||
The put-to-call ratio of 4.14 is significantly elevated for a stable consumer services business, indicating that options market participants are paying substantial premiums to hedge against additional downside despite the quality moat — a signal that investor sentiment has turned negative beyond what fundamentals would typically justify. Key risks | Put-to-call ratio falls below 2.0 within 6 months as the technical downtrend stabilizes and put hedges expire without being rolled, signaling the fear premium is unwinding. | ↓Deteriorating |
| CounterIn defensive stocks experiencing sector rotation, elevated put-to-call ratios often represent institutional portfolio hedges rather than directional bets; the ratio may remain elevated for the duration of the defensive rotation without indicating further downside. | ||
RSI has fallen to 26, which is in oversold territory, the stock is below its 200-day moving average with a slope of -1.6% per month, and on-balance volume has been flat, indicating technical capitulation that historically precedes mean reversion in high-quality companies with durable moats.
→StableMomentum breakdown
- Expectation
- RSI recovers above 40 within 3 months and price begins to approach the 200-day moving average from below, signaling that the selling pressure has exhausted itself.
CounterAn RSI of 26 and a death cross in a defensive services company can persist for 6 to 12 months when driven by multiple compression in a rising-rate environment rather than company-specific deterioration.
Analyst consensus implies 34% upside from the current $46.90 to the target of $56.64, reflecting the view that the current price does not adequately compensate for the quality and durability of Rollins' business model relative to its trading history.
Tripped↓DeterioratingSentiment breakdown
- Expectation
- Price recovers to above $54 within 12 months as the technical downtrend reverses and the market re-rates the business toward historical valuation multiples.
CounterAnalyst targets for mature consumer services businesses are frequently anchored to historical valuation multiples that may not be achievable in a higher interest rate environment where defensive yield alternatives compete for capital.
Rollins earns a 39% return on equity with a wide economic moat rating of 8.2 out of 10 and a Piotroski F-Score of 8 out of 9, reflecting the recurring-revenue nature of pest control contracts and a national route density advantage that is difficult for smaller operators to replicate.
→StableQuality breakdown
- Expectation
- Return on equity remains above 32% over the next four quarters as route density improvements in recently acquired territories drive margin expansion.
CounterA forward price-to-earnings multiple of 33.6 times and a PEG ratio of 3.38 mean Rollins is priced at a significant premium to its growth rate, leaving little room for error in an industry where growth is typically steady but not spectacular.
The put-to-call ratio of 4.14 is significantly elevated for a stable consumer services business, indicating that options market participants are paying substantial premiums to hedge against additional downside despite the quality moat — a signal that investor sentiment has turned negative beyond what fundamentals would typically justify.
↓DeterioratingKey risks
- Expectation
- Put-to-call ratio falls below 2.0 within 6 months as the technical downtrend stabilizes and put hedges expire without being rolled, signaling the fear premium is unwinding.
CounterIn defensive stocks experiencing sector rotation, elevated put-to-call ratios often represent institutional portfolio hedges rather than directional bets; the ratio may remain elevated for the duration of the defensive rotation without indicating further downside.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 6.5 |
| Op margin | 6.4 |
| Net margin | 6.9 |
| Current ratio | 2.6 |
| FCF quality | 6.9 |
| Moat | 8.2 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 39%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 8/9
Growth
3.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.0 |
| EPS growth | 2.3 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 5.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.1%/30d — confirmed downtrend
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.8 |
| Analyst rating | 7.4 |
| Price target | 8.9 |
- ▸Analyst upside: 35%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.7 |
| quality rank | 6.6 |
| growth rank | 7.1 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.8 |
| support resistance | 5.9 |
| 52w position | 3.2 |
| gap | 5.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.6 |
| days to cover | 8.0 |
| volatility | 5.4 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 8.5 |
| debt equity | 6.4 |
| news risk | 5.0 |
- ▸Elevated put/call: 6.39
- ▸High IV: 121%
- ▸Above max pain $38
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.5 |
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Earnings in 0 days
How the verdict was assembled
Engine trigger
Earnings in 0 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (4)
- ASYMMETRY:3.9>=1.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.4<4.5
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.87
Upside
+21.9%
Downside
5.7%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 57
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 0 days. Wait until post-earnings. The 10-dimension scores remain Quality at 7.4 (strongest), but MOMENTUM:4.4<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Quality at 7.4, Insider at 7.3, and Sentiment at 7.0; the weakest are Growth at 3.6, Value at 4.2, and Momentum at 4.4. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 3.87 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Economic Moat High Roe
Trip ifReturn on equity falls below 28% for 2 consecutive quarters, indicating the moat is weakening under competitive or cost pressures.
- P2Technical Downtrend Rsi Oversold
Trip ifRSI falls below 20 and price drops more than 15% below the current $46.90, indicating selling pressure is intensifying rather than approaching exhaustion.
- P334 Pct Analyst Upside Quality DiscountTripped
Trip ifAnalyst consensus price target is revised below $48, less than 3% above the current price, indicating analysts are cutting fair value estimates significantly.
- P4Elevated Put Call Ratio Options Risk
Trip ifPut-to-call ratio rises above 6.0, more than 45% above the current 4.14, indicating the options market is pricing in even greater downside risk than currently reflected.