Resources

FTDR – Market expectations are for Uniform ROA to decline, but management is confident about their partnerships, costs, and retention rate

September 2, 2020

  • frontdoor, inc. (FTDR:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.7x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about their partnerships, costs, and retention rate

  • Specifically, management is confident they acquired a business that is expected to accelerate the development of their On-demand business, that they have been actively developing new partnerships for their Streem technology, and strengthening realty partnerships to establish a strong position in the home sale market. In addition, they are confident that their sourcing team or the supply management team mitigated higher costs from their multi-vendor strategy, that their home service plan helps with their retention rate, and that the volume decline in real estate was offset by favorable price flowing through in Q2