Rollins Q3: Revenue Grows, Profit Misses Again
Rollins reported Q3 EPS of $0.34, missing consensus by 1.4% in its third miss over four quarters as revenue growth of 6.2% failed to expand margins. The stock's 26.3x forward earnings multiple depends
Rollins Q3 2026: Revenue Grows but Profit Falls Again
NEW YORK, October 22 —
Rollins, Inc. (ROL) reported Q3 2026 adjusted EPS of $0.34, its third earnings miss in four quarters and a recurring shortfall that strains the case for a stock priced at a premium. Revenue rose 6.2% as profit and margins fell year-over-year.
- Revenue grew 6.2% in Q3, below the 7.9% trailing twelve-month pace: sequential deceleration.
- Stock trades at 26.3x forward earnings; short interest stands at 9.3% of the float.
Margins Compress Where Revenue Grows
Rollins runs pest control, termite treatment, and wildlife removal for homeowners and commercial clients in healthcare, food service, and logistics. The services model has justified premium pricing, with a 52.4% gross margin and $502 million in trailing free cash flow; trailing twelve-month revenue stands at $3.92 billion. The Q3 pressure is coming from within those gains: costs are rising in a business that structurally should widen margins at scale. A DCF calculator run on current margins implies a recovery that Q3 results have not shown.
Three Misses Signal a Lower Bar, Not Better Execution
Rollins has delivered negative EPS surprises in three of its last four quarters: Q4 2025 at -7.5%, Q2 2026 at -5.9%, and now Q3 2026 at -1.4%, per the 8-K filed October 21. The lone positive quarter, Q1 2026, was a marginal +1.3% beat. That is not a pattern of tightening execution; it suggests analysts have cut estimates to meet a lower bar, then barely cleared them. The consensus price target of $39.82 is roughly 19% above the current share price, but it reflects growth optimism set before margin compression became a trend.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| ROL | $16.1B | 26.3x | -41.0% |
| IEX | $17.4B | 24.4x | +39.8% |
| JKHY | $10.8B | 19.4x | -2.3% |
| MTD | $33.6B | 32.4x | +21.5% |
| VRSK | $25.2B | 22.1x | -18.1% |
| ALLE | $13.5B | 16.2x | -9.4% |
At 26x, One More Miss Resets the Multiple
At 26.3x forward earnings with quarterly revenue growth running below its own trailing trend, Rollins is priced for execution the past three quarters have not delivered. The multiple contracts on any further miss, and short interest at 9.3% of the float already reflects that calculation. The specific test: Q4 2026 EPS. A fourth consecutive miss makes the premium indefensible regardless of top-line trajectory. For investors tracking the setup, run the free Rollins, Inc. deep-dive →.
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Frequently Asked Questions
What were Rollins Q3 2026 earnings results?
Rollins reported adjusted EPS of $0.34, missing consensus by 1.4%. Revenue grew 6.2%, below its 7.9% trailing twelve-month pace, signaling sequential deceleration in the core business.
Why is Rollins missing earnings repeatedly?
The company has delivered negative EPS surprises in three of its last four quarters. This pattern suggests estimates are being cut to meet a lower bar rather than execution improving; the lone positive quarter was a marginal +1.3% beat.
What's happening to Rollins' profit margins?
Cost pressure is eating into the company's margins despite 6.2% revenue growth. Margins fell year-over-year, a concerning trend for a pest control business that typically justifies premium pricing with a 52.4% gross margin.
Is the stock still a buy at 26x forward earnings?
At 26.3x forward earnings with revenue growth running below its own trailing trend, Rollins is priced for execution the past three quarters have not delivered. A fourth consecutive miss makes the premium indefensible, and short interest at 9.3% of the float reflects this calculation.
What is Rollins' business model?
Rollins runs pest control, termite treatment, and wildlife removal for homeowners and commercial clients in healthcare, food service, and logistics. Trailing twelve-month revenue stands at $3.92 billion with $502 million in trailing free cash flow.
Rollins reported Q3 2026 adjusted EPS of $0.34, missing consensus for the third time in four quarters, even as revenue rose 6.2%. Profit and margins fell year-over-year — a divergence that strains the case for a stock still priced at 26 times forward earnings.