Rollins Earnings: Shares Remain Expensive Despite Impressive Organic Sales Growth in Early 2024

Wide-moat Rollins’ got off to a strong start in the first quarter of 2024. First-quarter sales grew by about 14%, including 7.5% in organic growth. The pleasing first-quarter organic growth outcome likely points to further outperformance of Rollins’ pest control business relative to the broader US pest control market in early 2024. Inclusion of revenue from the Fox acquisition—which completed part way through 2023—largely accounted for the remainder of the strong top-line result. The group’s EBIT margin widened by 130 basis points to 18.3%, with Rollins benefiting from operating leverage as its revenue base increases and its service technician route density improves.