FTDR - Embedded Expectations Analysis - 2020 09 02
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 rateSpecifically, 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
Frontdoor is a provider of home service plans in the U.S., and operates under the American Home Shield, HSA, OneGuard and Landmark brands. The company's home service plans help customers protect and maintain their homes, typically their asset, from costly and unplanned breakdowns of essential home systems and appliances. The company's home service plans cover the repair or replacement of main components of household systems and appliances, including electrical, plumbing, central heating, ventilation and air conditioning systems, water heaters, refrigerators, dishwashers and ranges/ovens/cooktops. The company serves customers across various states and the District of Columbia.
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