Frontdoor, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders of Frontdoor, Inc. (NASDAQ:FTDR) will be pleased this week, given that the stock price is up 11% to US$44.00 following its latest second-quarter results. It looks like a credible result overall - although revenues of US$542m were in line with what the analysts predicted, Frontdoor surprised by delivering a statutory profit of US$1.18 per share, a notable 18% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Frontdoor after the latest results.

Check out our latest analysis for Frontdoor

Taking into account the latest results, Frontdoor's six analysts currently expect revenues in 2024 to be US$1.84b, approximately in line with the last 12 months. Statutory per share are forecast to be US$2.65, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$1.83b and earnings per share (EPS) of US$2.50 in 2024. So the consensus seems to have become somewhat more optimistic on Frontdoor's earnings potential following these results.

The consensus price target rose 15% to US$48.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Frontdoor, with the most bullish analyst valuing it at US$56.00 and the most bearish at US$41.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Frontdoor's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 6.3% 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 9.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Frontdoor.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Frontdoor following these results. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Frontdoor going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Frontdoor that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com