Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 10 Jun 2026
ROL· Consumer Discretionary
Rollins
Rollins, Inc. has a strong ROIC of 20.7% but faces valuation challenges with a P/E of 48.2, raising concerns about future returns.
Buffett fit
Strong fit
Owner
68
Durability
93
Management
85
Price
2
Score updated 26 Sept 2026 · analysis from 10 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Rollins, Inc., I'd focus on maintaining its strong customer relationships and expanding service offerings.
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The durability of Rollins' business is strong, as evidenced by its consistent profitability over the last five years and a 0% EPS decline.
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Management has shown discipline with a share count CAGR of -0.41%, indicating a slight reduction in shares outstanding, which is positive.
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The current earnings yield of 2.07% and yield of 2.55% are significantly below the desirable 8-10% range, indicating that the stock is overvalued.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 20.7% places Rollins in the top quintile of its sector, indicating strong returns on invested capital.
- 2 of 19.0% is well above the sector's top-quintile cutoff of 12.1%.
- 3Consistent revenue growth with a 5-year CAGR of 11.6%, demonstrating strong demand for services.
- 4Net income of $526.71M indicates solid profitability in the pest control sector.
Concerns
5- 1 of 48.2 is significantly above the market average, suggesting the stock is overvalued.
- 2Current ratio of 0.65 raises concerns about short-term liquidity, indicating potential cash flow issues.
- 3 of 51.8% is below the sector's top-quintile cutoff of 51.9%, indicating weaker relative to peers.
- 4High valuation metrics (EV/ of 36.3) suggest limited room for error in growth expectations.
Price history
$30.16-17.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Rollins, Inc. provides pest control services to both residential and commercial customers, generating $3.76B in TTM revenue. The company's operations include traditional pest control and wildlife services, with a significant portion of revenue coming from franchisee operations. With a of 51.8%, the unit economics appear solid, but the high valuation raises questions about future profitability.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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