Frontdoor (spun off from ServiceMaster) is the parent company of four home service plan brands: American Home Shield, HSA, Landmark and OneGuard. Together, they serve more than two million customers across the U.S. through a network of 15,000 pre-qualified contractor firms that employ over 45,000 technicians. The company’s customizable home service plans help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances.
FTDR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for frontdoor inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that frontdoor inc ranked in the 21th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 75.67%. In terms of the factors that were most noteworthy in this DCF analysis for FTDR, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 7.14 -- which is good for besting 72.44% of its peer stocks (US stocks in the Consumer Cyclical sector with positive cash flow).
The company's compound free cash flow growth rate over the past 2.27 years comes in at -0.03%; that's greater than only 20.75% of US stocks we're applying DCF forecasting to.
frontdoor inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 21.43% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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Summary Sell Frontdoor (FTDR) at the current price of $50. A share price of $41 would better reflect the long-term growth prospects of the Company. However, even at a lower price level, I would be reluctant to add FTDR in my portfolio given the limited growth potential, imminent industry disruption...
Almira Research on Seeking Alpha | January 14, 2021
Frontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of home service plans, will release its fourth-quarter and full-year 2020 financial results after market close on Thursday, February 18, 2021.
In this article we will analyze whether frontdoor, inc. (NASDAQ:FTDR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into […]