Shares of global pest control and hygiene service provider Rentokil Initial (NYSE: RTO) have plummeted 20% as of 1:45 p.m. ET Wednesday, according to data provided by S&P Global Market Intelligence.

Providing a trading update earlier this morning, Rentokil warned that its organic revenue growth in North America for the second half of 2024 would only equal roughly 1%, missing management's previous guidance for 2% to 4%.

Why is the market so worried about this slight guidance miss?

While this one percentage point miss from the low end of management's guidance may not seem alarming, Rentokil's North American operations account for 60% of the company's total revenue and operating profit. Making matters worse, this North American unit has been an area of intense focus for management following Rentokil's $6.7 billion acquisition of Terminix in 2022, which launched the company's growth plans for the continent full speed ahead.

Making an acquisition nearly half the size of its own market capitalization, Rentokil announced its Right Way 2 Growth plan to ensure its massive new purchase was integrated successfully. Focusing on extending the reach of the Terminix brand, generating leads, retaining colleagues and customers post-acquisition, and adding the acquired company's employees into Rentokil's processes, this growth plan took a hit with today's news.

Compared to Rollins -- the company's largest North American peer -- and its 10% organic growth so far in 2024, Rentokil's 1% growth in the region through the first three quarters of 2024 looks like a potential red flag.

However, now trading at just 20 times free cash flow (FCF) -- as opposed to Rollins' lofty mark of 46 times FCF -- Rentokil could prove to be available at a discount if it can stick the landing with its Right Way 2 Growth plan.

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