Net customer additions and churn rates - organic growth in the installed base drives recurring revenue visibility
Loss ratio performance - claims costs as % of premiums (target 65-70%); weather events, HVAC/appliance inflation, and contractor wage inflation directly impact margins
Real estate transaction volumes - 30-40% of new customers acquired at home closings through realtor partnerships; existing home sales velocity is critical
Renewal rate trends - maintaining 75-80% renewal rates is essential for unit economics; deterioration signals pricing or service quality issues
moderate - The business exhibits counter-cyclical and pro-cyclical characteristics simultaneously. New customer acquisition is pro-cyclical, tied to existing home sales volumes which correlate with GDP growth and consumer confidence. However, renewal rates and service demand are counter-cyclical as homeowners retain coverage during downturns to avoid large repair bills. The 75-80% renewal base provides revenue stability, but growth rates slow when housing turnover declines. Historical data shows 5-10% revenue impact from 20% swings in existing home sales.
Rising interest rates negatively impact the business through two channels: (1) Mortgage rates above 6.5-7% suppress existing home sales by 15-25%, reducing new customer acquisition opportunities at closings, and (2) Higher rates pressure homeowner discretionary budgets, potentially increasing churn among price-sensitive customers. However, the impact is partially offset by homeowners staying in existing homes longer (increasing repair needs) and the company's ability to raise prices 3-5% annually. The high debt load (3.8x D/E) also increases interest expense as rates rise, compressing net margins by 100-200bps.
Regulatory risk - home warranty industry faces state-level insurance regulation; potential reclassification as insurance (vs service contract) could impose reserve requirements and capital constraints, reducing ROE
Disintermediation risk - direct-to-consumer HVAC/appliance service models (e.g., manufacturer extended warranties, on-demand platforms like Thumbtack) could erode the value proposition, particularly among younger homeowners comfortable with digital solutions
Climate change impact - increasing frequency/severity of extreme weather events (heat waves, freezes) drives claims volatility; loss ratios spiked 300-500bps during Texas freeze events and Western heat waves
value - The stock trades at 10x EV/EBITDA with 5.6% FCF yield, attracting value investors focused on cash generation and potential deleveraging. The 104% ROE (inflated by leverage) and capital-light model appeal to investors seeking high returns on tangible equity. However, modest 3.5% revenue growth limits appeal to growth investors. The recurring revenue model and defensive characteristics attract income-focused investors, though no dividend currently paid. Recent 43.9% EPS growth driven by margin expansion (not top-line) suggests operational improvement story.
Trend
+0.8% vs SMA 50 · +2.2% vs SMA 200
Momentum
Distribution pattern detected. More selling days than accumulation over the past 20 sessions. Not a conducive environment for a squeeze.
Based on volume distribution analysis. Direct short interest data (short float %, days to cover) is not available in current data sources.
ANALYST ESTIMATES
Analyst consensus estimates · Actuals replace estimates as reported
| Year | Revenue Est. | Rev Gth | EPS Est. | EPS Gth | Range | Analysts |
|---|---|---|---|---|---|---|
FY2023 | $1.8B $1.8B–$1.8B | — | $2.62 | — | ±1% | Low2 |
FY2024 | $1.8B $1.8B–$1.8B | ▲ +1.0% | $3.16 | ▲ +20.9% | ±5% | High5 |
FY2025 | $2.1B $2.1B–$2.1B | ▲ +13.9% | $4.00 | ▲ +26.4% | ±3% | High5 |
INSTITUTIONAL OWNERSHIP
FTDR News
About
frontdoor is a company that’s on a mission to make home ownership simple. we have the culture and drive of a billion-dollar startup, and are committed to transforming the home services industry. our company more than 50 years of unmatched expertise as the nation’s largest provider of home service plans. last year, we responded to more than four million service requests from customers who depend on us for financial protection and professional repairs when a covered item breaks down. at frontdoor, we wake up every day and obsess about how to take the hassle out of our customer’s lives. we’re inquisitive and innovative, never satisfied with the status quo. we solve problems and make lives better, and enjoy what we do. our leadership team has a dynamic mix of experience in disrupting industries, changing how consumers receive products and services, creating leading digital platforms, and ensuring a world-class customer experience. they don’t just talk about culture, they live it, and it's
| Symbol | Price | Day % | Mkt Cap↓ | P/E | Rev Grw | Margin | ELO |
|---|---|---|---|---|---|---|---|
FTDR◀ | $61.50 | -1.28% | $4.3B | 16.7 | +1356.5% | 1218.3% | 1500 |
| $264.14 | -1.15% | $2.8T | 31.3 | +1237.8% | 1083.4% | 1521 | |
| $422.24 | -4.75% | $1.6T | 352.3 | -293.1% | 400.1% | 1507 | |
| $297.51 | -2.25% | $296.3B | 20.9 | +324.0% | 859.6% | 1477 | |
| $276.39 | +0.52% | $196.4B | 22.6 | +372.3% | 3185.0% | 1478 | |
| $147.43 | +0.05% | $163.2B | 30.2 | +711.9% | 910.0% | 1494 | |
| $218.42 | -2.32% | $122.3B | 18.3 | +312.2% | 771.2% | 1489 | |
| Sector avg | — | -1.60% | — | 70.3 | +574.5% | 1203.9% | 1495 |