Value
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 7.6 |
| EV/EBITDA | 0.2 |
| Fwd P/E | 4.6 |
| PEG | 3.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 27.1x
- ▸PEG: 3.04
ROL · Why this verdict
Why Rollins (ROL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.6/10
ConfidenceHIGH
MacroRISK_OFF
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingMomentum 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.
↓DeterioratingQuality 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
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 9.3 |
| Gross margin | 6.4 |
| Op margin | 8.2 |
| Net margin | 6.6 |
| Current ratio | 2.5 |
| FCF quality | 7.3 |
| Moat | 6.9 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 36%
Growth
2.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
| EPS growth | 1.5 |
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 1.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -8.0%/30d — confirmed downtrend
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 5.0 |
| Price target | 6.6 |
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.5 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.0 |
| quality rank | 6.9 |
| growth rank | 5.7 |
Technical
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 3.3 |
| 52w position | 0.2 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.7 |
| days to cover | 7.9 |
| volatility | 4.6 |
| put call | 0.0 |
| implied vol | 5.7 |
| max pain risk | 7.0 |
| beta | 8.6 |
| debt equity | 6.1 |
- ▸Elevated put/call: 3.05
Catalyst
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.9 |
| dividend safety | 6.0 |
| news activity | 5.0 |
- ▸Earnings concerns: 0B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:104d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.2<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
12.6%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 58
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -49% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 3.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.2<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.1, Risk (lower is worse) at 5.7, and Insider at 5.2; the weakest are Technical at 2.4, Growth at 2.8, and Catalyst at 3.4. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
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.