Frontdoor (NASDAQ:FTDR) Trading Up 13.8% Following Better-Than-Expected Earnings

Key Points

• Shares jumped 13.8% after Frontdoor reported stronger-than-expected results—EPS of $0.73 versus $0.63 expected and revenue of $451.0M (vs. $442.3M), with volume up ~23% and the stock reaching about $68.97 from a $60.59 close.
• Analyst sentiment is mixed but the consensus is a "Moderate Buy" with an average target of $68.60; price targets range roughly $67–$80 following several upgrades and new coverage.
• Company fundamentals show a high ROE (120.79%) and 12.18% net margin with a $4.85B market cap, but a notable debt-to-equity ratio of 4.73, while institutions such as JPMorgan have recently increased their stakes.

Shares of Frontdoor Inc. (NASDAQ:FTDR - Get Free Report) traded up 13.8% on Thursday following a stronger than expected earnings report. The company traded as high as $68.80 and last traded at $68.9710. 774,103 shares traded hands during trading, an increase of 23% from the average session volume of 629,832 shares. The stock had previously closed at $60.59.

The company reported $0.73 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.63 by $0.10. Frontdoor had a net margin of 12.18% and a return on equity of 120.79%. The business had revenue of $451.00 million during the quarter, compared to the consensus estimate of $442.28 million. During the same period in the prior year, the firm posted $0.64 EPS. The firm's quarterly revenue was up 5.9% compared to the same quarter last year.

Wall Street Analysts Forecast Growth

Several analysts have issued reports on FTDR shares. Wall Street Zen cut shares of Frontdoor from a "buy" rating to a "hold" rating in a research note on Sunday, March 8th. The Goldman Sachs Group raised Frontdoor from a "sell" rating to a "neutral" rating and upped their target price for the stock from $50.00 to $67.00 in a research note on Monday, March 2nd. Benchmark began coverage on Frontdoor in a research note on Thursday, March 26th. They set a "buy" rating and a $80.00 price objective on the stock. Oppenheimer reissued an "outperform" rating and set a $70.00 price objective on shares of Frontdoor in a research note on Thursday, February 26th. Finally, Truist Financial set a $71.00 price target on Frontdoor in a research report on Monday, January 26th. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and three have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $68.60.

Institutional Trading of Frontdoor

A number of institutional investors and hedge funds have recently bought and sold shares of FTDR. JPMorgan Chase & Co. increased its stake in Frontdoor by 26.8% during the third quarter. JPMorgan Chase & Co. now owns 225,385 shares of the company's stock worth $15,166,000 after acquiring an additional 47,587 shares during the last quarter. Prana Capital Management LP bought a new stake in shares of Frontdoor in the 3rd quarter valued at approximately $1,762,000. Public Sector Pension Investment Board boosted its holdings in shares of Frontdoor by 11.7% in the 3rd quarter. Public Sector Pension Investment Board now owns 316,564 shares of the company's stock worth $21,302,000 after purchasing an additional 33,261 shares during the period. Assenagon Asset Management S.A. increased its position in shares of Frontdoor by 112.9% during the 4th quarter. Assenagon Asset Management S.A. now owns 80,069 shares of the company's stock valued at $4,619,000 after purchasing an additional 42,462 shares during the last quarter. Finally, Algert Global LLC raised its holdings in Frontdoor by 24.5% during the 3rd quarter. Algert Global LLC now owns 260,233 shares of the company's stock valued at $17,511,000 after buying an additional 51,214 shares during the period.

Frontdoor Stock Performance

The company has a debt-to-equity ratio of 4.73, a current ratio of 1.55 and a quick ratio of 1.55. The business has a 50-day moving average of $60.07 and a 200-day moving average of $58.70. The company has a market capitalization of $4.85 billion, a P/E ratio of 20.12 and a beta of 1.41.

About Frontdoor

Frontdoor, Inc NASDAQ: FTDR is a leading provider of home service plans and repair solutions for residential property owners. The company offers contract-based coverage that helps homeowners manage the cost of repairing and replacing essential household systems and appliances, including heating and cooling, plumbing, electrical wiring, water heaters, washers, dryers, refrigerators and other major kitchen equipment.

Frontdoor delivers its services through a nationwide network of independent service professionals and contractors, leveraging a cloud-based platform and call center infrastructure to coordinate service visits and process claims.

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