Frontdoor (NASDAQ:FTDR) Issues Earnings Results, Beats Estimates By $0.17 EPS

Frontdoor (NASDAQ:FTDR) posted its quarterly earnings results on Thursday. The company reported $1.93 EPS for the quarter, topping the consensus estimate of $1.76 by $0.17, FiscalAI reports. Frontdoor had a net margin of 12.72% and a return on equity of 120.90%. The company had revenue of $645.00 million during the quarter, compared to analysts’ expectations of $643.40 million. During the same quarter in the previous year, the business posted $1.63 EPS. The firm’s revenue was up 4.5% on a year-over-year basis.

Here are the key takeaways from Frontdoor’s conference call:

• Member growth returned: Total ending members increased 1% year over year, marking the first organic growth since 2021. Direct-to-consumer members rose 5% and real estate members grew 7%, despite a difficult housing market.
• Strong financial performance and raised guidance: Second-quarter revenue increased 5% to $645 million, adjusted EBITDA rose 10% to $220 million, and adjusted EPS grew nearly 20%. Frontdoor raised full-year revenue guidance to $2.19 billion–$2.21 billion and adjusted EBITDA guidance to $585 million–$600 million.
• Margins and retention remain robust: Gross margin expanded 100 basis points to 59%, while adjusted EBITDA margin reached 34%. Renewal retention was near a record at 79.6%, supported by improved member service, greater app usage, and 85% AutoPay enrollment.
• Non-warranty growth is scaling: Non-warranty and other revenue grew 19%, led by the HVAC upgrade program, which management expects to generate $170 million in annual revenue. The company is expanding into appliance sales and sees substantial runway given only 3% penetration of its member base so far.
• Second-half comparisons include headwinds: Management expects the approximately $5 million second-quarter weather benefit to largely reverse in the third quarter, while increasing marketing investment by more than $10 million. Existing home sales remain sluggish, and full-year direct-to-consumer revenue is expected to decline by a low-single-digit percentage.

Frontdoor Stock Up 1.0%

Shares of NASDAQ:FTDR opened at $90.83 on Friday. Frontdoor has a fifty-two week low of $48.47 and a fifty-two week high of $93.43. The company has a quick ratio of 1.47, a current ratio of 1.59 and a debt-to-equity ratio of 3.98. The firm’s 50-day simple moving average is $72.99 and its 200-day simple moving average is $64.73. The company has a market cap of $6.38 billion, a price-to-earnings ratio of 24.09 and a beta of 1.47.

Analysts Set New Price Targets

A number of equities analysts recently commented on FTDR shares. The Goldman Sachs Group reiterated a “neutral” rating on shares of Frontdoor in a research note on Friday. Weiss Ratings cut Frontdoor from a “buy (b)” rating to a “buy (b-)” rating in a research note on Thursday, May 21st. Benchmark lifted their price target on Frontdoor from $80.00 to $96.00 and gave the stock a “buy” rating in a report on Friday. Truist Financial lifted their price target on Frontdoor from $82.00 to $105.00 and gave the stock a “buy” rating in a report on Friday. Finally, Oppenheimer upped their price objective on Frontdoor from $70.00 to $100.00 and gave the stock an “outperform” rating in a research report on Friday. Four equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average price target of $92.00.

More Frontdoor News

Here are the key news stories impacting Frontdoor this week:

• Positive Sentiment: Q2 earnings beat expectations: Frontdoor reported adjusted earnings of $1.93 per share, above the $1.76–$1.78 analyst estimates and up from $1.63 a year ago. Revenue increased 4.5% year over year to $645 million, modestly ahead of the $643.4 million consensus. Frontdoor Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Guidance and operating trends improved: Management raised its full-year revenue outlook to approximately $2.19 billion–$2.21 billion. The outlook reflects returning membership growth and margin expansion, while third-quarter revenue guidance of $642 million–$652 million is above the $641.1 million consensus. FTDR Q2 Deep Dive
• Positive Sentiment: Shareholder returns support sentiment: Frontdoor plans to repurchase up to $330 million of its shares in 2026, which could reduce the share count and provide additional support for earnings per share. Frontdoor Plans 2026 Buybacks
• Positive Sentiment: Analysts became more bullish: Benchmark raised its price target from $80 to $96 and assigned a Buy rating, while Truist increased its target from $82 to $105 and also rated the stock Buy. The revisions indicate greater confidence in Frontdoor’s earnings outlook following the quarterly results. Benzinga analyst updates

Hedge Funds Weigh In On Frontdoor

Several institutional investors and hedge funds have recently added to or reduced their stakes in FTDR. Corient Private Wealth LLC lifted its holdings in shares of Frontdoor by 8.6% in the 4th quarter. Corient Private Wealth LLC now owns 5,409 shares of the company’s stock valued at $312,000 after buying an additional 427 shares during the period. Invesco Ltd. grew its holdings in Frontdoor by 2.5% during the fourth quarter. Invesco Ltd. now owns 1,136,647 shares of the company’s stock worth $65,573,000 after acquiring an additional 27,832 shares during the period. Mercer Global Advisors Inc. ADV grew its holdings in Frontdoor by 31.4% during the fourth quarter. Mercer Global Advisors Inc. ADV now owns 5,339 shares of the company’s stock worth $308,000 after acquiring an additional 1,275 shares during the period. Summit Global Investments raised its position in Frontdoor by 1.5% in the fourth quarter. Summit Global Investments now owns 20,310 shares of the company’s stock worth $1,172,000 after acquiring an additional 298 shares in the last quarter. Finally, Empowered Funds LLC raised its position in Frontdoor by 483.4% in the fourth quarter. Empowered Funds LLC now owns 40,307 shares of the company’s stock worth $2,325,000 after acquiring an additional 33,398 shares in the last quarter.

Frontdoor Company Profile

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.