ROL
Rollins, Inc.
$53.46
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 37.6% above fair value
You pay
$53.46
Bear
$26.45
Fair
$38.85
Bull
$51.59
Bear
$26.45
-50.5%
7% stage 1 growth, 11% discount
Fair
$38.85
-27.3%
12% stage 1 growth, 11% discount
Bull
$51.59
-3.5%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
41.5x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $63.75 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $38.85 per share.
Warnings
Wall Street's average price target is $63.75 (from 17 analysts). Our estimate is 52% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions