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what it is
Frontdoor sells home repair plans that cover broken systems and appliances before your water heater decides violence.
how it gets paid
Last year Frontdoor made $2.1B in revenue. American Home Shield was the main engine at $1.05B, or 50% of sales.
why it's growing
Revenue grew 13.6% last year. That miss sits next to stronger full-year operating trends.
what just happened
The quarter missed on EPS, with actual profit of $0.23 versus a $0.50 estimate.
At a glance
B+ balance sheet — decent shape, but not bulletproof
55/100 earnings predictability — expect surprises
14.2x trailing p/e — the market's not buying it — or you found a deal
25.5% return on capital — every dollar works hard here
xvary composite: 56/100 — below average
What they do
Frontdoor sells home repair plans that cover broken systems and appliances before your water heater decides violence.
You do not shop for a home warranty when your AC dies in July. You call the brand you already pay. Frontdoor is the largest U.S. home service plan provider by revenue, with $2.1 billion in annual sales across all 50 states and D.C. That scale helps pricing and cost control, which is why operating margin hit 24.5% and return on capital reached 25.5%.
How they make money
$2.1B
annual revenue · their business grew +13.6% last year
American Home Shield
$1.05B
+10.0%
2-10 Home Buyers Warranty
$0.42B
+13.0%
Landmark Home Warranty
$0.23B
+14.0%
OneGuard and HSA
$0.21B
+8.0%
Streem and on-demand services
$0.19B
+20.0%
The products that matter
sells home warranty plans
American Home Shield Plans
$2.1B revenue · 100% of sales
it's the core business and the whole reported revenue base at $2.1B. You are not buying a portfolio of businesses. You are buying this category.
100% of revenue
home buyer warranty platform
2-10 Home Buyers Warranty
helped drive +13.6% annual growth
management tied part of the recent growth story to 2-10 HBW. That matters because acquisition help looks good in the first year and ordinary in the second.
acquisition boost
pricing and claims discipline
Pricing and Cost Management
supported margins on $618M quarterly revenue
this is not a side initiative. It supported margins in the quarter that produced $618M in revenue, which tells you the model depends on underwriting-like discipline as much as brand awareness.
margin lever
Key numbers
24.5%
operating margin
Operating margin → profit left after running the business → so what: Frontdoor keeps about 25 cents from each revenue dollar before interest and taxes.
25.5%
return on capital
Return on capital → profit earned on the money tied up in the business → so what: this company turns invested dollars into earnings better than most service businesses.
$2.1B
annual revenue
This is the current sales base, and it gives context for the $3.0B 2029 revenue estimate. The company needs roughly $0.9B more revenue to get there.
14.2x
trailing p/e
P/E → price divided by profit per share → so what: you are paying 14.2 times trailing earnings for a business with mid-single-digit earnings growth estimates.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $1.2B (22% of capital)
- net profit margin 14.0% — keeps 14 cents of every dollar in revenue
- return on equity 55% — $0.55 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in FTDR 3 years ago → it's now worth $20,590.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
The quarter missed on EPS, with actual profit of $0.23 versus a $0.50 estimate.
That miss sits next to stronger full-year operating trends. Value from pricing and cost control is real, but the market just learned this story is not a straight line.
$525M
revenue
$3.38
eps
56.9%
gross margin
the number that mattered
The 54% EPS miss mattered most because this stock is being valued on consistency, not just growth.
-
frontdoor is scheduled to release fourth-quarter and full-year results on february 26th.
-
recall, the company generated good results in the third quarter.
-
revenues advanced more than 14% vs. prior year, to $618 million.the acquisition of 2-10 home buyers warranty (2-10 hbw) played a significant role, boosting volume growth.
-
meanwhile, margins improved from cost management and pricing strategies.
-
the housing market was a headwind, but share earnings reached $1.58 in the september quarter.
source: company earnings report, 2026
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What could go wrong
the #1 risk is claims costs rising faster than frontdoor can reprice home warranty plans.
med
claims inflation
frontdoor just showed that pricing and cost actions can protect margins. The reverse matters more. If contractor pay, parts, or claim severity rise faster than plan pricing, the 14.0% net margin compresses fast.
with 100% of revenue tied to one category and $2.1B of annual sales in that category, there is no side business to absorb the hit.
med
housing turnover stays weak
management has already pointed to housing pressure. Fewer home transactions can slow new plan sales and make acquisition-led growth harder to replace with organic demand.
if turnover stays muted, investors will need renewals and pricing to carry more of the $2.1B revenue base.
med
acquisition help normalizes
2-10 HBW helped drive the recent growth story. Once that benefit annualizes, frontdoor has to prove the core book can hold revenue and earnings without a deal doing part of the work.
the street already models about $2B of revenue versus the current $2.1B annual figure. Expectations are leaving room for that slowdown.
a forced reset in pricing power would pressure the full $2.1B business, because FTDR is concentrated by design.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
february 26 results
this is the next clean read on revenue, claims expense, and whether the recent $618M quarter was a peak or a base.
metric
revenue vs. the $2B street view
trailing revenue is $2.1B while the forward view sits around $2B. That gap is the argument in one line.
trend
pricing discipline
margins improved because pricing and cost management worked. If that stops working, the 14.2x multiple stops looking modest.
risk
housing softness vs. earnings resilience
the september quarter produced $1.58 in EPS despite housing pressure. Watch whether renewals and claims control keep that resilience intact.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak: analysts do not see a strong near-term edge either way.
risk profile
average
stability score 3 means typical stock risk. Not a bunker stock. Not a disaster magnet.
chart momentum
average
technical score 3 says the chart is behaving normally, not sending you a loud signal.
earnings predictability
55 / 100
55 / 100 predictability means you should expect a few crooked quarters. This is not a metronome business.
source: institutional data
Institutional activity
183 buyers vs. 190 sellers in 3q2025. total institutional holdings: 74.4M shares.
source: institutional data
Price targets
3-5 year target range
$43
$118
$58
current price
$81
target midpoint · +39% from current · 3-5yr high: $110 (+90% · 17% ann'l return)
Want the deeper analysis?
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