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Frontdoor, Inc. (NASDAQ:FTDR) Just Reported And Analysts Have Been Lifting Their Price Targets
It's been a pretty great week for Frontdoor, Inc. (NASDAQ:FTDR) shareholders, with its shares surging 11% to US$97.09 in the week since its latest third-quarter results. Frontdoor reported US$655m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.65 beat expectations, being 4.3% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Frontdoor's seven analysts is for revenues of US$2.32b in 2027. This would reflect an okay 6.4% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 9.5% to US$4.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.32b and earnings per share (EPS) of US$4.62 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for Frontdoor
The consensus price target rose 5.7% to US$101despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Frontdoor's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Frontdoor, with the most bullish analyst valuing it at US$115 and the most bearish at US$93.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Frontdoor's past performance and to peers in the same industry. We would highlight that Frontdoor's revenue growth is expected to slow, with the forecast 5.1% annualised growth rate until the end of 2027 being well below the historical 6.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Frontdoor is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Frontdoor's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Frontdoor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Frontdoor going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Frontdoor that you need to take into consideration.
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