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Why Is Rollins (ROL) Down 7.3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Rollins (ROL - Free Report) . Shares have lost about 7.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Rollins due for a breakout? 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 catalysts.

Rollins Q3 Earnings Match Estimates

Rollins third-quarter 2019 earnings came in line with the Zacks Consensus Estimate and revenues beat the same.

Adjusted earnings came in at  22 cents per share, up 4.8% year over year. Revenues of $556.5 million beat the consensus mark by $10.5 million and improved 14.1% year over year.

Quarterly Details

Income before income taxes of $46.1 million declined 48.7% year over year. Net income of $44.1 million decreased 33.9%. Sales, general and administrative expenses of $167.2 million were up 15.2% year over year.

Rollins exited the third quarter with cash and cash equivalents’ balance of $104.4 million compared with $98.5 million in the prior quarter. Long-term debt at the end of the quarter was $313.5 million.

The company terminated its fully-funded pension plan in the quarter with the transfer of $198.3 million of U.S. pension obligations.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Rollins has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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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