Frontdoor Q1 revenue rises 6%, beats estimates on higher prices

Overview

• U.S. home warranty provider's Q1 revenue rose 6%, beating analyst expectations

• Adjusted EPS and adjusted EBITDA for Q1 both beat analyst expectations

• Company repurchased $60 mln in shares and reaffirmed full-year 2026 outlook

Outlook

• Frontdoor sees Q2 revenue of $635 mln to $650 mln

• Company expects Q2 adjusted EBITDA of $198 mln to $208 mln

• Frontdoor reaffirms 2026 revenue outlook of $2.155 bln to $2.195 bln

Result Drivers

• PRICE INCREASES - Revenue growth was mainly driven by a 5% increase in realized price, according to the company

• RENEWAL CHANNEL - Renewal revenue rose 6% due to higher price realization

• COST PRESSURES - Contract claims costs and sales and marketing expenses increased, reflecting cost inflation and higher marketing investments to drive direct-to-consumer channel growth

Company press release: ID:nBw2bS7Cca

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 3 "hold" and no "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 $75.00, about 23.8% above its April 29 closing price of $60.59

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 14 three months ago

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