Rollins, Inc. (ROL): A Bull Case Theory

We came across a bullish thesis on Rollins, Inc. on Daniel's Deep Dive’s Substack. In this article, we will summarize the bulls’ thesis on ROL. Rollins, Inc.'s share was trading at $63.03 as of January 29th. ROL’s trailing and forward P/E were 58.91 and 50.25 respectively according to Yahoo Finance.

Rollins Inc. is a classic example of a high quality, low drama compounder operating quietly in an often overlooked industry. The company sits at the center of the global pest control market, providing essential, recurring services that protect homes, businesses, and supply chains.

Founded in 1948 and still controlled by the Rollins family, which owns roughly 40% of the shares, the company has delivered about 21% annualized returns over the past 25 years by focusing on long term value creation, disciplined capital allocation, and operational consistency.

Rollins operates as a holding company overseeing a network of pest control brands, led by its flagship Orkin brand, while benefiting from centralized systems in finance, IT, routing, and training. Its business model is built around recurring contracts that function like subscriptions, offering prevention and ongoing protection rather than one off treatments. Residential pest control accounts for about 45% of revenue, commercial services about 33%, and termite and ancillary services roughly 20%, creating a diversified yet predictable revenue base.

The industry itself is large, fragmented, and steadily growing, with Rollins holding roughly 25% share of the US market and benefiting from strong brand trust, dense local coverage, pricing power, and regulatory driven customer stickiness.

Growth is supported by both steady organic expansion and a highly repeatable acquisition strategy focused on small, local operators that are quickly integrated into Rollins’ platform. Financially, the company is capital light, generates strong free cash flow, maintains adjusted EBITDA margins near 24% with room for expansion, and operates with conservative leverage. Overall, Rollins combines a durable moat, resilient growth, and disciplined balance sheet management into a quietly exceptional long term business.

Previously, we covered a bullish thesis on APi Group Corporation (APG) by Kairos Research in November 2024, which highlighted the shift toward recurring, inspection led fire safety revenue and disciplined acquisitions. APG’s stock price has appreciated by approximately by 14.23% since our coverage. Daniel’s Deep Dive shares a similar thesis but emphasizes recurring, regulatory-driven services through pest control.

Rollins, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held ROL at the end of the third quarter which was 42 in the previous quarter. While we acknowledge the potential of ROL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.