Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Rollins, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 9.2% to 3.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 25, DPO 12, DIO 9). At a 8.4% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $23.29 per share, suggesting ROL is overvalued by 56.0% at the current price of $52.92.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 870 | 945 | 1,026 | 1,105 | 1,145 | 1,173 |
| (−) Net Interest | 19 | 21 | 23 | 24 | 25 | 26 |
| (+) D&A | 29 | 32 | 34 | 37 | 42 | 43 |
| EBITDA | 918 | 998 | 1,083 | 1,166 | 1,212 | 1,242 |
| (−) Tax | 224 | 244 | 265 | 285 | 295 | — |
| (−) CapEx | 40 | 44 | 47 | 51 | 53 | — |
| (−) ΔWC | 19 | 23 | 25 | 24 | 12 | — |
| Free Cash Flow (FCF) | 635 | 688 | 747 | 807 | 852 | — |
| Peers' EBITDA Multiple | 11.4x | |||||
| Terminal Value | 14,149 | |||||
| WACC / Discount Rate | 8.36% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 610 | 610 | 611 | 609 | 594 | 9,471 |
| Enterprise Value | 12,503 | |||||
| Projection Period | 3,033 | 24.3% | ||||
| Terminal Value | 9,471 | 75.7% | ||||
| (−) Current Net Debt | 1,229 | |||||
| Equity Value | 11,275 | |||||
| (÷) Outstanding Shares | 484M | |||||
| Fair Price | $23 | -56.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.4x | 9.4x | 11.4x | 13.4x | 15.4x |
|---|---|---|---|---|---|
| 6.4% | $18 | $22 | $26 | $29 | $33 |
| 7.4% | $17 | $21 | $24 | $28 | $32 |
| 8.4% | $16 | $20 | $23 | $27 | $30 |
| 9.4% | $16 | $19 | $22 | $26 | $29 |
| 10.4% | $15 | $18 | $21 | $24 | $28 |
Current price: $52.92. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.