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Why Is Rollins (ROL) Up 0.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Rollins (ROL - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Rollins due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Rollins Miss Earnings Estimates in Q1

Rollins reported mixed first-quarter 2020 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.

Adjusted earnings of 13 cents per share missed the consensus mark and declined year over year by 7.1% each. Revenues of $487.9 million beat the consensus mark by 2.5% and improved 13.7% year over year.

Other Quarterly Details

Earnings before income taxes (EBIT) of $55.4 million decreased 1.2% year over year. EBIT margin shrunk 171 basis points (bps) year over year.

Net income of $43.3 million decreased 2.2% year over year. Net income margin contracted 144 bps year over year. Sales, general and administrative expenses of $154.8 million were up 13.1% year over year.

Rollins exited the first quarter with cash and cash equivalents balance of $92.6 million compared with the prior quarter’s $94.3 million. Long-term debt at the end of the reported quarter was $307.3 million.

How Have Estimates Been Moving Since Then?

Estimates revision followed a downward path over the past two months. The consensus estimate has shifted 18.92% due to these changes.

VGM Scores

Currently, Rollins has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Rollins has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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