Rollins Q2 revenue slightly beats estimates on slower residential growth

Overview

• US pest control firm's Q2 revenue rose 7.9%, slightly beating analyst expectations

• Q2 adjusted EBITDA missed analyst estimates

• Company cites slower residential demand and margin pressure, but notes late-quarter improvement in leads

Outlook

• Company remains cautious on near-term demand trends due to softer lead volume

Result Drivers

• SLOWER RESIDENTIAL DEMAND - Co said slower growth in residential pest control, especially brands reliant on consumer-initiated demand through digital channels, weighed on results

• RELATIONSHIP-BASED CHANNELS - Relationship-based channels such as home builders and door-to-door sales delivered solid organic growth

• MARGIN PRESSURE - Margin performance was below expectations as demand softened while cost structure remained set for stronger growth

Company press release: ID:nPn6dq8y1a

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the business support services peer group is "buy"

• Wall Street's median 12-month price target for Rollins Inc is $55.50, about 26.5% above its July 21 closing price of $43.86

• The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 42 three months ago

Reuters Recommended Reads

• July 21 - D.R. Horton cuts annual revenue forecast as high costs dent margins

• July 22 - PulteGroup quarterly profit falls as home affordability pressure persists

• July 22 - Healthcare Services Group Q2 revenue slightly misses estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)