Frontdoor (FTDR)
NASDAQ:FTDR
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frontdoor
(NASDAQ:FTDR)
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Rating:73Outperform
Price Target:
$58.00
▲(9.72% Upside)
Action:ReiteratedDate:03/18/26
The score is driven primarily by strong profitability and free-cash-flow generation, supported by constructive price trends and a positive earnings-call outlook (raised long-term margin targets and continued buybacks). The main constraint is elevated balance-sheet leverage, with valuation appearing fair rather than deeply discounted.
Positive Factors
Strong cash generation
Frontdoor's material improvement in operating cash flow and near‑net‑income-level free cash flow provides durable financial flexibility. Sustained FCF supports buybacks, reinvestment in technology and non-warranty initiatives, and cushions operating volatility over the next several years.
Negative Factors
High leverage and thin equity base
Elevated leverage with a small equity cushion increases sensitivity to revenue or margin shocks and interest-rate moves. High debt constrains capital allocation flexibility and raises refinancing and covenant risk over economic cycles despite strong cash flow generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Frontdoor's material improvement in operating cash flow and near‑net‑income-level free cash flow provides durable financial flexibility. Sustained FCF supports buybacks, reinvestment in technology and non-warranty initiatives, and cushions operating volatility over the next several years.
Read all positive factors
frontdoor (FTDR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.85B
Dividend YieldN/A
Average Volume (3M)821.69K
Price to Earnings (P/E)16.5
Beta (1Y)1.15
Revenue Growth11.88%
EPS Growth18.08%
CountryUS
Employees2,120
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)0.23
Shares Outstanding70,617,690
10 Day Avg. Volume983,560
30 Day Avg. Volume821,690
Financial Highlights & Ratios
PEG Ratio1.17
Price to Book (P/B)17.43
Price to Sales (P/S)2.01
P/FCF Ratio10.84
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue2.19
Enterprise Value/Gross Profit3.96
Enterprise Value/Ebitda9.17
Forecast
1Y Price Target
$71.67Price Target Upside35.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)4.48
Revenue Forecast (FY)$2.17B
frontdoor Business Overview & Revenue Model
Company Description
Frontdoor, Inc. provides home service plans in the United States. The company's home service plans cover the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heate...
How the Company Makes Money
Frontdoor primarily makes money by selling home warranty service contracts (typically annual plans) to homeowners and, in some cases, through real estate channel sales tied to home transactions. Revenue is generated largely from customer contract ...
frontdoor Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a strong operational and financial performance in 2025 with notable margin expansion, record free cash flow, aggressive share repurchases and progress on strategic initiatives (member stabilization, non-warranty expansion, and 2-10 integration). Management also set conservative near-term guidance that balances promotional investments to drive member growth with preserving margins, and raised long-term adjusted EBITDA margin targets. Short-term headwinds include slow existing-home sales, a planned revenue tradeoff in DTC from promotional pricing, tariff/claims cost uncertainty, and early-stage non-warranty initiatives (appliances). On balance, the positive results, raised margin guidance, cash generation and clear roadmap for member growth and non-warranty scale outweigh the manageable near-term challenges.Positive Updates
Record Revenue and Top-Line Growth
Full-year revenue increased 14% year-over-year to nearly $2.1 billion; 2026 revenue guide of $2.155B–$2.195B (3%–5% growth) and reaffirmed long-term target of $2.5 billion by 2028.
Negative Updates
Real Estate Channel Headwinds
Existing home sales volumes remained near historic lows in 2025, weighing on the ability to sell warranties in the real estate channel. Management expects real estate volume to be only modestly improved in 2026 (modeled ~3%–4% existing-home sales growth).
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and Top-Line Growth
Full-year revenue increased 14% year-over-year to nearly $2.1 billion; 2026 revenue guide of $2.155B–$2.195B (3%–5% growth) and reaffirmed long-term target of $2.5 billion by 2028.
Read all positive updates
Company Guidance
Frontdoor guided full-year 2026 revenue of $2.155–$2.195 billion with gross margin of 54%–55%, SG&A of $660–$680 million, adjusted EBITDA of $565–$580 million (~26% margin), and adjusted‑EBITDA‑to‑free‑cash‑flow conversion in the low‑60% range; they expect CapEx of $30–$35 million and an effective tax rate of ~25%. Management expects ending member count to grow in 2026 driven by ~5% combined growth in first‑year channels, with renewal revenue up low‑single‑digits, first‑year DTC down low‑single‑digits, first‑year real estate relatively flat, and non‑warranty/other growing to $220–$240 million (HVAC ~ $165 million). Q1 2026 revenue is guided to $440–$445 million and adjusted EBITDA to $95–$105 million (lapping a $7 million favorable Q1 ’25 claims development). They raised their long‑term adjusted EBITDA margin target from the low‑20% to the mid‑20% range, reaffirmed a $2.5 billion revenue target by 2028, and remain on track to complete the remaining ~$329 million of the $650 million buyback authorization by early 2027; liquidity was about $660 million and net leverage 1.4x at year‑end 2025.frontdoor Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
44
Neutral
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.09B | 1.84B | 1.78B | 1.66B | 1.60B |
| Gross Profit | 1.16B | 991.00M | 848.00M | 676.00M | 749.00M |
| EBITDA | 506.00M | 388.00M | 311.00M | 153.00M | 232.00M |
| Net Income | 255.00M | 235.00M | 171.00M | 71.00M | 128.00M |
Balance Sheet | |||||
| Total Assets | 2.14B | 2.11B | 1.09B | 1.08B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 566.00M | 436.00M | 325.00M | 292.00M | 262.00M |
| Total Debt | 1.21B | 1.22B | 610.00M | 627.00M | 644.00M |
| Total Liabilities | 1.90B | 1.87B | 952.00M | 1.02B | 1.07B |
| Stockholders Equity | 242.00M | 239.00M | 137.00M | 61.00M | 3.00M |
Cash Flow | |||||
| Free Cash Flow | 389.00M | 231.00M | 170.00M | 102.00M | 154.00M |
| Operating Cash Flow | 415.00M | 270.00M | 202.00M | 142.00M | 185.00M |
| Investing Cash Flow | 31.00M | -622.00M | -32.00M | -35.00M | -31.00M |
| Financing Cash Flow | -302.00M | 448.00M | -137.00M | -77.00M | -489.00M |
frontdoor Technical Analysis
Negative
52.86
Price Trends
59.50
Negative
57.40
Negative
59.67
Negative
Market Momentum
-2.09
Positive
38.89
Neutral
31.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTDR, the sentiment is Negative. The current price of 52.86 is below the 20-day moving average (MA) of 59.49, below the 50-day MA of 59.50, and below the 200-day MA of 59.67, indicating a bearish trend. The MACD of -2.09 indicates Positive momentum. The RSI at 38.89 is Neutral, neither overbought nor oversold. The STOCH value of 31.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FTDR.
frontdoor Risk Analysis
frontdoor disclosed 40 risk factors in its most recent earnings report. frontdoor reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
frontdoor Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $25.95B | 55.17 | 36.92% | 1.12% | 11.17% | 9.81% | |
73 Outperform | $3.85B | 16.54 | 101.49% | ― | 11.88% | 18.08% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $11.80B | 20.35 | 33.83% | 1.66% | 3.41% | 7.94% | |
| ― | $6.40M | -51.23 | -1.53% | ― | -2.53% | 99.45% |
* Consumer Cyclical Sector Average
FTDR
frontdoor
54.58
16.35
42.77%
ROL
Rollins
53.93
3.58
7.11%
SCI
Service International
84.77
10.93
14.80%
EJH
E-Home Household Service Holdings
2.00
-1,385.50
-99.86%
frontdoor Corporate Events
Business Operations and StrategyExecutive/Board Changes
Frontdoor Appoints Dennis Howard to Board and Audit Committee
Positive
Mar 17, 2026
On March 16, 2026, Frontdoor’s board unanimously elected Dennis Howard, currently Managing Director and Chief Technology, Operations and Data Officer at Charles Schwab, to its board of directors and appointed him to the Audit Committee, effe...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.