GICS Sector : Consumer Cyclical
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 heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and central heating, ventilation, and air conditioning systems.
Frontdoor's 2025 revenue increased 14% year-over-year to nearly $2.1 billion, driven by a 2-10 volume growth, expansion in non-warranty, and price increases. The company's gross profit margin reached a record 55%, and net income grew 9% to $255 million. Adjusted EBITDA grew 25% to $553 million, with a record $280 million spent on share repurchases. The actual EPS came out at $0.23, beating estimates of $0.11, showcasing the company's strong profitability.
Publication Date: Mar -01
The company stabilized its member count in 2025, a key milestone, and expects member count to grow in 2026, driven by continued strength in first-year channels. The new HVAC upgrade program grew 48% to $128 million, and the company launched an appliance upgrade program in select markets, indicating a successful expansion of its service offerings.
For 2026, revenue is expected to be in the range of $2.155 billion to $2.195 billion, with adjusted EBITDA margins around 26%. The company expects to maintain strong gross margin levels and generate significant cash flow, driving long-term value creation. Analysts estimate next year's revenue growth at 5.8%, aligning with the company's guidance for low single-digit growth.
Frontdoor's current valuation metrics, including a P/E Ratio of 19.28, P/S Ratio of 2.36, and EV/EBITDA of 11.56, indicate a reasonable valuation. The company's ROIC of 20.73% and ROE of 101.09% demonstrate its ability to generate strong returns on capital and equity. The Free Cash Flow Yield of 7.87% is also attractive, suggesting a potential upside in the stock.
The company plans to invest in growth engines like non-warranty, sales and marketing, and AI tools to drive efficiency. They are prioritizing growing ending member count, with a balanced approach to investments and low CapEx of $30 million to $35 million, generating significant cash. The home warranty count is expected to grow 5% this year, driven by growth in first-year real estate and direct-to-consumer channels.
American Home Shield and Rachel Dratch Return for Year Three of “Warrantina” to Demystify the Misconceptions of Home Warranties
Mar -31
Assenagon Asset Management S.A. Raises Stake in Frontdoor Inc. $FTDR
Mar -30
Critical Survey: Frontdoor (NASDAQ:FTDR) vs. Owens Corning (NYSE:OC)
Mar -25
Frontdoor Stock Pullback: A Buying Opportunity Or A Value Trap?
Mar -19
Dennis Howard Joins Frontdoor Board of Directors
Mar -17
Algert Global LLC Acquires 51,214 Shares of Frontdoor Inc. $FTDR
Mar -15
Frontdoor (NASDAQ:FTDR) vs. Compagnie de Saint-Gobain (OTCMKTS:CODYY) Head-To-Head Contrast
Mar -15
Holcim (OTCMKTS:HCMLY) and Frontdoor (NASDAQ:FTDR) Head to Head Contrast
Mar -13
The home repair and remodeling market is driven by factors such as aging housing stock, increasing homeowner affluence, and a trend towards outsourcing home maintenance. General Contractors is poised to capitalize on these trends, leveraging its network of contractors to deliver high-quality services. The segment's growth is expected to be slightly above the global average, driven by its strong market position and the growing demand for its services.
A home warranty that provides protection against unexpected repair and replacement costs for major home systems and appliances.
A home warranty that provides coverage for home systems and appliances, with flexible pricing and coverage options.
A home warranty that provides comprehensive coverage for home systems and appliances, with a focus on customer service.
A home services platform that connects homeowners with pre-screened and qualified professionals for home repair and maintenance needs.
A home services platform that provides on-demand home repair and maintenance services, with a focus on convenience and speed.
Frontdoor, Inc. operates in a highly competitive market, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.
Frontdoor, Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative service providers.
Frontdoor, Inc. has a diversified supplier base, which reduces the bargaining power of suppliers.
The threat of new entrants is moderate due to the high barriers to entry in the home services market, but Frontdoor, Inc. must continue to innovate to stay ahead of potential competitors.
The home services market is highly competitive, and Frontdoor, Inc. faces intense rivalry from established players and new entrants.
| Value | |
|---|---|
| Debt Weight | 81.66% |
| Debt Cost | 8.39% |
| Equity Weight | 18.34% |
| Equity Cost | 8.39% |
| WACC | 8.39% |
| Leverage | 445.26% |
Value: 7.8
Growth: 6.0
Quality: 6.7
Yield: 7.0
Momentum: 1.5
Volatility: 8.7
1-Year Total Return ->
Value: 0.5
Growth: 7.1
Quality: 7.7
Yield: 2.0
Momentum: 8.0
Volatility: 9.7
1-Year Total Return ->
Value: 3.7
Growth: 6.4
Quality: 4.7
Yield: 4.0
Momentum: 5.0
Volatility: 9.3
1-Year Total Return ->
Value: 7.8
Growth: 6.4
Quality: 4.3
Yield: 4.0
Momentum: 0.5
Volatility: 7.0
1-Year Total Return ->
Value: 4.8
Growth: 6.6
Quality: 6.8
Yield: 0.0
Momentum: 4.5
Volatility: 5.3
1-Year Total Return ->
Value: 3.1
Growth: 5.9
Quality: 5.0
Yield: 0.0
Momentum: 4.5
Volatility: 5.7
1-Year Total Return ->