BofA Securities has resumed coverage of Rollins Inc. (NYSE: ROL), issuing a Buy rating and setting a $67.00 price objective, the firm said. That target equates to approximately a 12% increase from the stock’s then-current trading level of $59.89, although InvestingPro data referenced in the coverage notes indicates the shares may be trading above their Fair Value.
Rollins operates a widely distributed pest control platform, with more than 800 locations in over 70 countries and a market capitalization of $28.59 billion. The company also has a long history of shareholder distributions, having paid dividends for 56 consecutive years, according to the InvestingPro figures cited alongside the coverage announcement.
BofA analyst Curtis Nagle framed Rollins’ strategy as a repeatable growth algorithm that pairs mid-single-digit-plus organic expansion with disciplined tuck-in mergers and acquisitions. That combination, Nagle said, enables Rollins to scale a decentralized, multi-brand model and to take share in a fragmented industry. The firm pointed to recent momentum, noting Rollins reported 10.99% revenue growth over the last twelve months.
Based on that playbook, BofA expressed confidence that Rollins can deliver at least high-single-digit total revenue growth in coming years. The bank also suggested that initiatives to centralize certain functions and to optimize operating costs could lift EBITDA margins to levels substantially above current Street estimates.
Those positive forward-looking remarks came against the backdrop of Rollins’ fiscal 2025 fourth-quarter results, which missed analyst expectations. The company reported EPS of $0.25, short of the $0.26 estimate, and revenue of $913 million, below the $926.81 million consensus. The miss led to a material decline in the company’s share price following the release.
Market reactions included a move by Canaccord Genuity to lower its price target on Rollins to $52.00 from $55.00 while retaining a Hold rating. Canaccord’s commentary noted the firm’s fourth-quarter sales were roughly 2% below consensus, though they were about 1% ahead of Canaccord’s internal forecast.
Within the quarter’s revenue mix, Rollins’ recurring business - which accounts for more than 80% of total revenue - grew organically by more than 7%. By contrast, one-time business declined by 3%, a drop the company attributed to adverse weather conditions during the period. Those dynamics underscore the relative stability of the recurring revenue base alongside variability in non-recurring services.
Key takeaways
- BofA reinstated coverage on Rollins with a Buy rating and a $67.00 price target, implying about 12% upside from $59.89.
- The bank highlights a growth model combining mid-single-digit organic expansion and tuck-in M&A, with recent 12-month revenue growth of 10.99% supporting that thesis.
- Rollins missed fiscal 2025 Q4 estimates on both EPS ($0.25 vs. $0.26) and revenue ($913M vs. $926.81M), prompting a notable share-price decline and a separate price-target reduction from Canaccord Genuity to $52.00.
Sectors affected - The developments are most directly relevant to the pest control and broader facility services sectors, and have implications for investors focused on recurring-revenue business models within services and M&A-driven consolidation strategies.
Risks and uncertainties
- Near-term execution risk: The company’s most recent quarter missed consensus on revenue and EPS, demonstrating potential volatility in short-term results - a factor for equity investors in services sectors.
- Weather-related exposure: One-time services declined by 3% in the quarter due to inclement weather, highlighting how non-recurring revenue streams remain susceptible to environmental variability.
- Valuation considerations: InvestingPro data referenced by BofA indicates the shares may be trading above Fair Value, creating potential downside if anticipated growth or margin improvements do not materialize as forecasted.
Overall, BofA’s coverage restart frames Rollins as a company with a durable, acquisition-augmented growth strategy and room to expand margins through centralization, even as recent quarterly results and weather-driven variability introduce short-term uncertainty. Market participants will likely watch upcoming quarters for evidence that recurring revenue growth and margin-enhancement initiatives are progressing toward the levels BofA described.