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Why Is Rollins (ROL) Up 2.5% 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 2.5% 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 the most recent earnings report in order to get a better handle on the important drivers.
Rollins Q1 Earnings Meet Estimates
Rollins, Inc. first-quarter 2024 earnings meet the Zacks Consensus Estimate and revenues beat the same.
Adjusted earnings of 20 cents per share increased 11.1% year over year. Revenues of $748.3 million beat the consensus mark by 2.9% and improved 13.7% year over year. Organic revenues of $702.4 million increased 7.5% year over year.
Rollins’ performance in the quarter was positively impacted by a healthy demand environment for its services. Management said that the company remains well-positioned for organic as well as inorganic growth in 2024. The company’s acquisitions pipeline remained strong in the quarter.
Quarter Details
Residential revenues increased 16.5% year over year to $329.3 million and beat our estimate of $309 million. Commercial revenues increased 11.4% year over year to $258.1 million and surpassed our estimate of $239.1 million. Termite and ancillary revenues increased 11.7% year over year to $152 million and beat our estimate of $144.4 million.
Adjusted EBITDA of $161 million increased 19.3% year over year. This compares to our expectation of an adjusted EBITDA of $159.8 million, up 14.6% year over year. Adjusted EBITDA margin of 21.5% increased 100 basis points (bps) year over year compared with our expectation of an adjusted EBITDA margin of 22.8%, up 160 bps year over year.
Rollins exited the quarter with a cash and cash equivalents balance of $113 million compared with the prior quarter’s $103.8 million. Long-term debt at the end of the quarter was $510.9 million compared with $490.8 million at the end of the prior quarter.
The company generated $127.4 million of cash from operating activities in the quarter and capital expenditure was $7.2 million. Free cash flow came in at $120.3 million. The company paid dividends worth $73 million in the quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Rollins has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, 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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Why Is Rollins (ROL) Up 2.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Rollins (ROL - Free Report) . Shares have added about 2.5% 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 the most recent earnings report in order to get a better handle on the important drivers.
Rollins Q1 Earnings Meet Estimates
Rollins, Inc. first-quarter 2024 earnings meet the Zacks Consensus Estimate and revenues beat the same.
Adjusted earnings of 20 cents per share increased 11.1% year over year. Revenues of $748.3 million beat the consensus mark by 2.9% and improved 13.7% year over year. Organic revenues of $702.4 million increased 7.5% year over year.
Rollins’ performance in the quarter was positively impacted by a healthy demand environment for its services. Management said that the company remains well-positioned for organic as well as inorganic growth in 2024. The company’s acquisitions pipeline remained strong in the quarter.
Quarter Details
Residential revenues increased 16.5% year over year to $329.3 million and beat our estimate of $309 million. Commercial revenues increased 11.4% year over year to $258.1 million and surpassed our estimate of $239.1 million. Termite and ancillary revenues increased 11.7% year over year to $152 million and beat our estimate of $144.4 million.
Adjusted EBITDA of $161 million increased 19.3% year over year. This compares to our expectation of an adjusted EBITDA of $159.8 million, up 14.6% year over year. Adjusted EBITDA margin of 21.5% increased 100 basis points (bps) year over year compared with our expectation of an adjusted EBITDA margin of 22.8%, up 160 bps year over year.
Rollins exited the quarter with a cash and cash equivalents balance of $113 million compared with the prior quarter’s $103.8 million. Long-term debt at the end of the quarter was $510.9 million compared with $490.8 million at the end of the prior quarter.
The company generated $127.4 million of cash from operating activities in the quarter and capital expenditure was $7.2 million. Free cash flow came in at $120.3 million. The company paid dividends worth $73 million in the quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Rollins has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Rollins has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.