Frontdoor Inc is headquartered in Memphis, Tennessee. The company was founded in 1971, and its major subsidiary is American Home Shield (AHS). The performance of this NASDAQ-listed stock has been phenomenal for the year-to-date. From January 1 through September 10, 2019 the stock has generated an 82.09% return, with a 3-month performance of 15.56%. The stock has posted outsized earnings in relation to its forecasts since Q3 2018. A cursory examination of the Yahoo! consensus EPS (earnings per share) and the actual results reads as follows:
- Q3 2018 – earnings beat by $0.08
- Q4 2018 – earnings beat by $0.17
- Q1 2019 – earnings beat by $0.06
- Q2 2019 – earnings beat by $0.22
Source: StockCharts FTDR (September 10, 2019)
It is worth pointing out that the NASDAQ analysis of FTDR earnings is equally positive over the past fiscal year. Zacks Investment Research compiled data from 6 analysts to generate the consensus recommendation, and the results are as follows:
- September 2018 – EPS of $0.67 and consensus EPS of $0.65 – 3.08% surprise
- December 2018 – EPS of $0.23 and consensus EPS of $0.08 – 187.5% surprise
- March 2019 – EPS of $0.19 and consensus EPS of $0.12 – 58.33% surprise
- June 2019 – EPS of $0.73 and consensus EPS of $0.5 – 46% surprise
FTDR clearly displays bullish performance over time, resulting in outsized earnings and positive expectations among shareholders and analysts. Technical analysis of the performance of FTDR indicates the 50-day moving average price of $47.53 and the 200-day moving average price of $36.32. This clearly reflects strong bullish momentum with FTDR, given that it is $12 above its 200-day MA, and $1 above its 50-day MA (September 10, 2019). While whipsaw behavior is expected with stocks from day-to-day, the long-term trend for the year-to-date is strongly bullish.
On a rating scale of 1 (strong buy) through 5 (sell), FTDR currently has a value of 1.7. This indicates a long position (positive sentiment). Recommendation ratings since September 2018 are bullish with strong buy and buy recommendations among analysts. The 1-year estimate price of the stock is $51.60, with a 52-week low of $20.66 and a 52-week high of $53.30. The earnings per share (EPS) was measured at $1.65, and the next earnings announcement is expected on 4 November 2019.
What Services Are Provided By FTDR?
Frontdoor Inc (NASDAQ: FTDR) is primarily a building subcontractor. The company provides a range of services, including repairs and replacement of electrical appliances and systems, HVAC systems, water heaters, plumbing, dishwashers, cooktops, and home service plans. Its premier company – American Home Shield – is a leading provider of home warranty services in the United States. This company boasts a solid reputation among the top home warranty providers in the country with minimal waiting time and other complaints reported, compared to many other providers. American Home Shield was founded in 1971. It is BBB accredited, and a member of the NHSCA (National Home Service Contract Association).
Frontdoor Inc is headed by Rex J. Tibbens who is the President and CEO. The Senior Vice President and Chief Technical Officer is Piras Thiyagarajan, and the Senior Vice President and Chief Financial Officer is Brian Turcotte. As of Q2 2019, the company generated revenue of $388 million, with a net income of $60 million and a profit margin of 15.46%. The company’s balance sheet for Q2 2019 indicates total assets of $1,179 million, and liabilities of $1,457 million, with a debt-to-asset ratio of 85.33%. The company’s cash flow is positive with $88 million, with $-7 million in investing and $-2 million in financing.
In terms of future projections for the company, Frontdoor Inc certainly has the backing of institutional investors, which indicates that large money managers and hedge funds have an interest in the stock and its performance moving forward. The company’s gross revenues of $1.26 billion and its price/sales ratio of 3.37 are certainly impressive, with high EPS and P/E ratios to boot. Some 0.1 % of FTDR shares are owned by company insiders. All of this supports the consensus recommendation of a buy rating for the stock.
Disclaimer:
- The author of this article does not own or plan to own any shares within 72 hours of any stocks mentioned in this article.
- The author of this article does not have any paid relationship with the publicly trading company listed in this article.
- The author was not compensated to provide a positive opinion of the stock in this article. The author’s professional opinion was based solely on an in-depth assessment of the stock.
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