ROL
Rollins, Inc.
$43.76
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 19.1% above fair value
You pay
$43.76
Bear
$25.19
Fair
$36.73
Bull
$48.58
Bear
$25.19
-42.4%
7% stage 1 growth, 11% discount
Fair
$36.73
-16.1%
12% stage 1 growth, 11% discount
Bull
$48.58
+11.0%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
35.5x
Market is pricing in (growth)
16.6%
vs 11.7% base
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 $58.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $36.73 per share.
Warnings
Wall Street's average price target is $58.00 (from 18 analysts). Our estimate is 49% 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