Rollins (NYSE: ROL) beat estimates by one cent last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Wednesday, Jan. 25. Rollins provides pest and termite control services to residential and commercial customers in North America with additional franchises in Mexico, Central America, the Caribbean, the Middle East, and Asia.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Rollins with two of three analysts rating it hold. Analysts don't like Rollins as much as competitor Healthcare Services Group overall. Three out of six analysts rate Healthcare Services Group a buy compared to one of three for Rollins.
  • Revenue Forecasts: On average, analysts predict $290.8 million in revenue this quarter. That would represent a rise of 3.9% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.15 per share. Estimates range from $0.14 to $0.15.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.6% awarding it an "outperform" rating. The community at large backs the All-Stars with 94.7% giving it a rating of "outperform." Fools have embraced Rollins, though the message boards have been quiet lately with only 40 posts in the past 30 days. Despite the majority sentiment in favor of Rollins, the stock has a middling CAPS rating of three out of five stars.

Management:
Rollins' profit has risen year over year by an average of 7.4% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q3 Q2 Q1 Q4
Gross Margin 49.0% 50.2% 48.1% 47.3%
Operating Margin 14.5% 15.5% 11.0% 10.8%
Net Margin 9.1% 9.7% 6.9% 6.9%

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