Frontdoor (FTDR)
NASDAQ:FTDR
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frontdoor
(NASDAQ:FTDR)
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Rating:69Neutral
Price Target:
$67.00
▲(7.82% Upside)
Action:Downgraded
Date:05/19/26
The score is driven mainly by strong profitability and cash flow, reinforced by a generally positive earnings call with reaffirmed outlook and strong cash return plans. The biggest constraint is elevated balance-sheet leverage, while technicals and valuation are only moderately supportive.
Positive Factors
Strong free cash flow generation
Consistent, large FCF (TTM $385M) and high conversion of earnings into cash underpin durable financial flexibility. This supports reinvestment, share repurchases and liquidity buffers, enabling the company to fund growth initiatives and manage debt without relying solely on external financing.
Negative Factors
Elevated balance-sheet leverage
High leverage (≈5x debt/equity) increases sensitivity to earnings volatility and refinancing risks. Thin equity amplifies the impact of adverse results or rate moves, constraining strategic optionality and making durable deleveraging a priority before materially lowering financial risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent, large FCF (TTM $385M) and high conversion of earnings into cash underpin durable financial flexibility. This supports reinvestment, share repurchases and liquidity buffers, enabling the company to fund growth initiatives and manage debt without relying solely on external financing.
Read all positive factors
frontdoor (FTDR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.71B
Dividend YieldN/A
Average Volume (3M)569.75K
Price to Earnings (P/E)18.2
Beta (1Y)1.14
Revenue Growth12.12%
EPS Growth14.91%
CountryUS
Employees2,120
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)3.55
Shares Outstanding70,234,924
10 Day Avg. Volume522,577
30 Day Avg. Volume569,745
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 Cap1.05
Enterprise Value/Revenue2.33
Enterprise Value/Gross Profit4.55
Enterprise Value/Ebitda9.63
Forecast
1Y Price Target
$81.00Price Target Upside30.35% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)4.54
Revenue Forecast (FY)$2.18B
frontdoor Business Overview & Revenue Model
Company Description
Frontdoor, Inc. operates as a U.S.-based provider of extensive home service plans. These comprehensive plans are designed to cover the repair or replacement of key components for roughly two dozen household systems and appliances. This broad cover...
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:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call communicates a predominantly positive operational and financial trajectory: healthy top-line growth (+6% revenue), margin stability (55% gross margin), improving member trends (expected +1% member count for 2026, first organic growth since 2020), strong cash generation ($114M FCF) and meaningful non-warranty growth (+23%). Management is investing to accelerate DTC and real estate recovery, evidenced by rising SG&A and promotional strategies that temporarily weighed on certain revenue lines (first-year DTC revenue -5%) and retention mix. Macro and contractor cost risks were acknowledged but characterized as manageable with multiple mitigation levers. Overall, positives (growth, margins, cash returns, member momentum) outweigh the near-term operational trade-offs and macro uncertainties.Positive Updates
Revenue and Top-Line Growth
Total revenue grew 6% year-over-year to $451 million in Q1 2026, driven ~5% by higher realized price and ~1% by volume (primarily HVAC upgrades). Q2 revenue guidance of $635M–$650M and reaffirmed full-year outlook indicate confidence in seasonal and annual performance.
Negative Updates
First-Year Direct-to-Consumer Revenue Decline
First-year direct-to-consumer revenue decreased 5% YoY in Q1 due to the promotional pricing strategy implemented to drive member acquisition. The lower realized price mix partially offset higher volume from new members.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Top-Line Growth
Total revenue grew 6% year-over-year to $451 million in Q1 2026, driven ~5% by higher realized price and ~1% by volume (primarily HVAC upgrades). Q2 revenue guidance of $635M–$650M and reaffirmed full-year outlook indicate confidence in seasonal and annual performance.
Read all positive updates
Company Guidance
Frontdoor reaffirmed its 2026 outlook while guiding Q2 revenue of $635–$650 million and adjusted EBITDA of $198–$208 million, with channel-level expectations of low‑single‑digit renewal revenue growth, mid‑single‑digit first‑year real estate growth, a low‑single‑digit decline in first‑year DTC, and a mid‑20% increase in non‑warranty and other revenue. Management reiterated full‑year targets (reaffirmed) and expects total member count to grow roughly 1% in 2026, that 53%–54% of full‑year adjusted EBITDA will be generated in the first half, and that adjusted EBITDA will convert to free cash flow at a rate of more than 60% for the year. The guidance builds on a strong Q1 start (revenue $451M, +6%; gross margin 55%; gross profit $248M; adjusted EBITDA $104M, +3%; net income $41M, +11%; adjusted diluted EPS $0.73, +14%; free cash flow $114M) and a capital allocation plan that returned $60M in repurchases in the quarter, left liquidity of $698M, a low net leverage ratio, and remains on track to complete the buyback authorization by early 2027.frontdoor Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
52
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.12B | 2.09B | 1.84B | 1.78B | 1.66B | 1.60B |
| Gross Profit | 1.08B | 1.07B | 952.00M | 848.00M | 676.00M | 749.00M |
| EBITDA | 513.00M | 508.00M | 408.00M | 304.00M | 188.00M | 275.00M |
| Net Income | 260.00M | 255.00M | 235.00M | 171.00M | 71.00M | 128.00M |
Balance Sheet | ||||||
| Total Assets | 2.16B | 2.14B | 2.11B | 1.09B | 1.08B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 603.00M | 566.00M | 436.00M | 325.00M | 292.00M | 262.00M |
| Total Debt | 1.18B | 1.21B | 1.22B | 610.00M | 627.00M | 644.00M |
| Total Liabilities | 1.94B | 1.90B | 1.87B | 952.00M | 1.02B | 1.07B |
| Stockholders Equity | 230.00M | 242.00M | 239.00M | 137.00M | 61.00M | 3.00M |
Cash Flow | ||||||
| Free Cash Flow | 385.00M | 389.00M | 231.00M | 170.00M | 102.00M | 154.00M |
| Operating Cash Flow | 410.00M | 415.00M | 270.00M | 202.00M | 142.00M | 185.00M |
| Investing Cash Flow | -23.00M | 31.00M | -622.00M | -32.00M | -35.00M | -31.00M |
| Financing Cash Flow | -292.00M | -302.00M | 448.00M | -137.00M | -77.00M | -489.00M |
frontdoor Technical Analysis
Positive
62.14
Price Trends
61.65
Positive
60.74
Positive
60.58
Positive
Market Momentum
0.70
Negative
64.48
Neutral
90.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTDR, the sentiment is Positive. The current price of 62.14 is below the 20-day moving average (MA) of 62.70, above the 50-day MA of 61.65, and above the 200-day MA of 60.58, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 64.48 is Neutral, neither overbought nor oversold. The STOCH value of 90.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $4.71B | 18.22 | 99.90% | ― | 12.12% | 14.91% | |
66 Neutral | $23.00B | 43.45 | 36.94% | 1.12% | 11.03% | 11.08% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $10.20B | 16.39 | 39.46% | 1.66% | 2.76% | 4.18% | |
| ― | $6.24M | 0.02 | -1.53% | ― | -1.57% | ― |
* Consumer Cyclical Sector Average
FTDR
frontdoor
67.10
10.90
19.40%
ROL
Rollins
47.77
-8.52
-15.14%
SCI
Service International
73.84
-4.28
-5.48%
EJH
E-Home Household Service Holdings
1.95
-62.55
-96.98%
frontdoor Corporate Events
Executive/Board ChangesShareholder Meetings
Frontdoor Shareholders Approve Directors, Auditors and Executive Pay
Positive
May 18, 2026
Frontdoor held its 2026 annual meeting of stockholders on May 13, 2026, where 94.89% of eligible shares were represented, ensuring a quorum for formal business. At the meeting, shareholders elected eight directors to one-year terms expiring at the...
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.