Gold prices cool after hitting over 2-week high on Fed independence fears
On Friday, Goldman Sachs updated its outlook on Frontdoor Inc. (NASDAQ:FTDR), increasing the price target to $44 from the previous $40 while maintaining a Sell rating on the company’s shares. The stock, currently trading at $46.53, has shown remarkable momentum with a 13.34% gain in the past week. According to InvestingPro analysis, the stock’s RSI indicates overbought conditions. The adjustment follows Frontdoor’s first-quarter earnings report, which surpassed expectations on multiple fronts.
Frontdoor’s management highlighted several key points during the earnings announcement, emphasizing their focus on growing and retaining warranty members as a strategic priority. The company, with a market capitalization of $3.46 billion and trailing twelve-month revenue of $1.84 billion, raised its full-year 2025 guidance for both revenue and adjusted EBITDA. Management acknowledged ongoing vigilance regarding tariffs and macroeconomic concerns but noted they have anticipated some cost inflation beyond normal levels. Efforts to enhance margins, which currently stand at 53.77% gross profit margin, were also mentioned as part of their broader strategy.
The use of dynamic pricing was identified as a crucial tool for optimizing member counts and safeguarding margins. This aligns with Frontdoor’s strategy of leveraging promotional pricing in the direct-to-consumer channel. Despite challenges in the real estate market, the company’s guidance for 2025 includes the integration of 2-10 Home Buyers Warranty and a slight improvement in organic real estate leads.
Goldman Sachs’ analyst pointed out that investors are likely to focus on the company’s increased guidance as a sign of management’s confidence in executing strategic priorities amidst uncertainties related to tariffs and the general economic climate.
Frontdoor also plans to return capital to shareholders over time, reflecting the free cash flow generation capabilities of the business. The revised price target from Goldman Sachs incorporates updated estimates based on the latest financial data and management’s forward-looking statements.
In other recent news, Frontdoor, Inc. reported strong first-quarter earnings for 2025, surpassing analyst expectations. The company achieved adjusted earnings per share of $0.64, exceeding the estimated $0.44. Revenue reached $426 million, beating the consensus estimate of $412.16 million and marking a 13% increase year-over-year. This performance was bolstered by a 3% increase in pricing and a 10% rise in volume, largely attributed to the acquisition of 2-10. Frontdoor’s gross profit margin expanded by 380 basis points to a record 55% for the first quarter. The company has raised its full-year revenue guidance to between $2.03 billion and $2.05 billion, up from the previous consensus of $2.02 billion. Additionally, the adjusted EBITDA outlook has been increased to a range of $500-520 million. Frontdoor’s direct-to-consumer member count grew 15% to 310,000, benefiting from the 2-10 acquisition and 4% organic growth. The company has repurchased $105 million worth of shares so far in 2025 and aims to increase this to at least $200 million for the year.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.