ROL

ROL

Rollins, Inc.

Dividend / Cash flow

★ Quality 82/100
Overvalued

Price today

$35.86

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charlieapp.co

What this business is made of

82qualityReturnsMoatBalance sheetPricing powerReinvestment

The business

They charge a subscription as long as cockroaches exist: eternal rent on bugs.

Rollins is pest control. Through Orkin and a dozen brands, they exterminate termites, rodents, and insects for homes and businesses. The trick is the recurring contract: $3.8B in revenue in 2025, most of it subscriptions that renew themselves as long as cockroaches keep existing.

Route density and brand. Orkin has been around over 120 years; when you have pests, you call the name you know, you don't shop around. Dense local routes make each visit cheaper than a scattered competitor's. It's an execution moat, not a patent one — replicable in theory, costly in practice.

Revenue history

$2.4B
2021
$2.7B
2022
$3.1B
2023
$3.4B
2024
$3.8B
2025
CAGR 5 años: +12%

From $2.4B to $3.8B in 4 years. The business grows steadily.

Where each $100 of sales goes

Revenue $3.8B · FY2025

Cost of sales$1.8B · 47%
Operations$1.3B · 33%
Taxes and other$199M · 5%
Net profit$527M · 14%

Of every $100 in sales, $86 goes to costs and operations; $14 is left as net profit (14% margin).

Catalysts and risks

Bolt-on acquisitions: Rollins buys ~30-40 local operators a year, consolidating a fragmented market of thousands of small players.

18% FCF margin on $3.8B generates $0.7B of cash to reinvest and raise the dividend, which has grown double digits for years.

Organic growth of 7-8% from price hikes customers barely notice on a small monthly bill.

⚠️

Trades at 23x normalized FCF. Excellent business, price that already prices in a lot of excellence.

⚠️

Growth depends on continuing to buy routes; if good targets run out, the M&A engine cools off.

⚠️

A deep recession cuts discretionary commercial spending on fumigation, though residential holds up well.

Charlie's note

A boring business that prints money because pests don't go into recession. The problem isn't Rollins, it's paying 23 times for something everyone already knows is good.

Analysis · June 2026

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