Home warranties provider Frontdoor Q3 revenue beats analyst estimates on higher prices, volume

Overview

• Frontdoor Q3 revenue rises 14% to $618 mln, beating analyst expectations

• Adjusted EPS for Q3 beats consensus, rising 15% year-over-year

• Company repurchased $215 mln of shares YTD, reflecting financial confidence

Outlook

• Frontdoor raises full-year revenue forecast to $2.075 bln-$2.085 bln

• Company increases full-year Adjusted EBITDA guidance to $545 mln-$550 mln

• Frontdoor expects Q4 revenue of $415 mln-$425 mln

Result Drivers

• 2-10 ACQUISITION - Revenue growth largely driven by the acquisition of 2-10 Home Buyers Warranty, boosting volume and real estate revenue

• LOWER SERVICE REQUESTS - Gross profit margin benefited from a lower number of service requests per customer, aided by favorable weather

• NEW PROGRAMS - Significant growth in 'Other' revenue due to new HVAC and Moen Programs and New Home Structural Warranty revenue

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the personal services peer group is "buy"

• Wall Street's median 12-month price target for Frontdoor Inc is $63.00, about 4.3% below its November 4 closing price of $65.74

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nBw4qd5jxa

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)