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frontdoor
(NASDAQ:FTDR)
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Rating:78Outperform
Price Target:
$87.00
▲(21.70% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by strong operating profitability and cash generation, reinforced by a bullish earnings update with raised guidance and sizable share repurchases. Technicals are supportive with price above major moving averages and positive MACD. Offsetting these positives, elevated balance-sheet leverage is the main risk, and valuation at ~20.5x earnings is fair rather than clearly discounted.
Positive Factors
Strong cash generation
Consistent, high free cash flow (≈$386M TTM) and strong conversion from adjusted EBITDA (>60%) provide durable funding for reinvestment, share repurchases, and liabilities. This cash generation supports strategic flexibility and resilience through industry cycles.
Negative Factors
High financial leverage
Elevated debt relative to modest equity (≈5x debt-to-equity) materially limits financial flexibility, increases sensitivity to interest-rate or demand shocks, and constrains capital allocation choices despite improving equity and healthy cash flow conversion.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, high free cash flow (≈$386M TTM) and strong conversion from adjusted EBITDA (>60%) provide durable funding for reinvestment, share repurchases, and liabilities. This cash generation supports strategic flexibility and resilience through industry cycles.
Read all positive factors
frontdoor (FTDR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.10B
Dividend YieldN/A
Average Volume (3M)645.65K
Price to Earnings (P/E)20.5
Beta (1Y)1.17
Revenue Growth12.12%
EPS Growth14.91%
CountryUS
Employees2,034
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)3.83
Shares Outstanding70,234,924
10 Day Avg. Volume438,074
30 Day Avg. Volume645,655
Financial Highlights & Ratios
PEG Ratio1.18
Price to Book (P/B)17.43
Price to Sales (P/S)2.01
P/FCF Ratio10.84
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$97.33Price Target Upside36.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
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 service plan (home warranty) contracts and collecting plan fees from customers in advance (typically monthly or annually). When a covered item breaks, the customer files a claim; Frontdoor then arran...
frontdoor Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial trajectory: revenue, margins, net income and adjusted EBITDA all grew and full-year guidance was raised. Management highlighted an inflection to member growth, strong retention (79.6%), rapid scaling of non-warranty programs (HVAC), robust free cash flow conversion (>60%), and an accelerated share repurchase plan. Headwinds are present but largely manageable: promotional pricing pressures in direct-to-consumer, ongoing housing-market constraints, low-single-digit cost inflation, and a Q2 weather benefit expected to reverse in Q3. Management is investing incrementally in marketing and expects SG&A step-ups, and non-warranty margins are lower today but improving with dynamic pricing. Overall, the positive operational momentum, margin expansion and capital returns materially outweigh the modest near-term challenges.Positive Updates
Revenue Growth
Total revenue grew 5% year-over-year to $645 million in Q2; first half revenue up 5% to $1.1 billion and full-year guidance raised by $25 million at the midpoint to $2.19–$2.21 billion.
Negative Updates
Direct-to-Consumer Revenue Pressure
First-year direct-to-consumer revenue decreased 2% in Q2 due to lower realized price from promotional pricing; company expects a low-single-digit decrease in direct-to-consumer revenue for full year and Q3 as promotional acquisition pricing continues.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenue grew 5% year-over-year to $645 million in Q2; first half revenue up 5% to $1.1 billion and full-year guidance raised by $25 million at the midpoint to $2.19–$2.21 billion.
Read all positive updates
Company Guidance
Frontdoor raised its 2026 outlook, increasing full‑year revenue by $25M at the midpoint to $2.19–2.21B (driven by +3–4% realized price and +1–2% volume) with non‑warranty & other revenue expected at $230–240M; gross margin is forecasted at ~55%, SG&A $685–695M, adjusted EBITDA $585–600M (≈27% margin at the midpoint) including about $45M of stock‑comp & integration costs and ~$20M of interest income, capex ≈$30M and an effective tax rate of ~25%. Management plans to repurchase roughly $330M of stock in 2026, expects to convert >60% of adjusted EBITDA to free cash flow, and noted ~55% of full‑year adjusted EBITDA is already behind them; Q3 guidance is revenue $642–652M and adjusted EBITDA $197–207M, with channel guidance of low‑to‑mid single‑digit renewal growth, low single‑digit real‑estate increases, low single‑digit DTC declines and >20% non‑warranty growth, while marketing will rise by >$10M (weighted to Q3) and a ~$5M Q2 weather benefit is expected to largely reverse in Q3.frontdoor Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
42
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.15B | 2.09B | 1.84B | 1.78B | 1.66B | 1.60B |
| Gross Profit | 1.15B | 1.07B | 952.00M | 848.00M | 676.00M | 749.00M |
| EBITDA | 530.00M | 518.00M | 408.00M | 311.00M | 153.00M | 232.00M |
| Net Income | 275.00M | 255.00M | 235.00M | 171.00M | 71.00M | 128.00M |
Balance Sheet | ||||||
| Total Assets | 2.19B | 2.14B | 2.11B | 1.09B | 1.08B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 627.00M | 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 | 1.90B | 1.90B | 1.87B | 952.00M | 1.02B | 1.07B |
| Stockholders Equity | 284.00M | 242.00M | 239.00M | 137.00M | 61.00M | 3.00M |
Cash Flow | ||||||
| Free Cash Flow | 386.00M | 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 | -25.00M | 31.00M | -622.00M | -32.00M | -35.00M | -31.00M |
| Financing Cash Flow | -318.00M | -302.00M | 448.00M | -137.00M | -77.00M | -489.00M |
frontdoor Technical Analysis
Positive
71.49
Price Trends
71.34
Positive
65.96
Positive
62.25
Positive
Market Momentum
0.83
Negative
58.46
Neutral
92.17
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 71.49 is below the 20-day moving average (MA) of 74.31, above the 50-day MA of 71.34, and above the 200-day MA of 62.25, indicating a bullish trend. The MACD of 0.83 indicates Negative momentum. The RSI at 58.46 is Neutral, neither overbought nor oversold. The STOCH value of 92.17 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.10B | 20.47 | 99.90% | ― | 12.12% | 14.91% | |
70 Neutral | $11.78B | 19.07 | 39.72% | 1.65% | 2.89% | 3.84% | |
63 Neutral | $18.27B | 34.52 | 37.20% | 1.85% | 9.90% | 9.06% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
40 Neutral | $3.68M | -0.50 | 1.38% | ― | -1.57% | ― |
* Consumer Cyclical Sector Average
FTDR
frontdoor
89.92
33.60
59.66%
ROL
Rollins
36.83
-20.96
-36.27%
SCI
Service International
84.96
6.95
8.90%
EJH
E-Home Household Service Holdings
1.28
-36.47
-96.61%
frontdoor Corporate Events
Executive/Board Changes
Frontdoor Appoints Hilla Sferruzza to Board, Audit Committee
Positive
Jun 29, 2026
On June 29, 2026, Frontdoor, Inc. expanded its board of directors to nine members and unanimously elected finance and real estate executive Hilla Sferruzza as a director, effective immediately. Sferruzza, currently Executive Vice President and Chi...
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...
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.