Truist Securities has reaffirmed its Buy recommendation on Frontdoor Inc. (NASDAQ:FTDR), maintaining a price objective of $71.00 and pointing to improved spending patterns in the fourth quarter as a key driver for the outlook.
Frontdoor shares were trading at $58.78 at the time of the report. InvestingPro fair value estimates characterize the stock as slightly undervalued, noting a price-to-earnings ratio of 16.98 and a market capitalization of $4.24 billion.
Truist analyst Mark Hughes cited the firm's card data showing a 3.3% increase in spending on Frontdoor in the fourth quarter, a reversal from a 0.2% decline recorded in the third quarter. The same dataset indicated that card transactions rose 1% in the fourth quarter, improving from a 1% decline in the prior quarter, while average revenue per transaction gained 2%, up from 1% growth in the third quarter.
Using those card-based indicators and adjustments to account for historical variance between the card signals and Frontdoor’s reported underlying growth, Truist concluded the company is positioned to deliver fourth-quarter revenue above consensus estimates.
Supporting the firm-level view, InvestingPro data points to 11.77% revenue growth for Frontdoor over the last twelve months, with total revenue of $2.04 billion and EBITDA of $472 million. Truist’s $71 target is predicated on an assumption that Frontdoor will trade at 10 times Truist’s 2026 EBITDA forecast - a multiple the firm notes remains below the company’s historical trading norm.
InvestingPro also reports that Frontdoor’s management has been aggressive in repurchasing shares while maintaining a moderate level of debt. The company has earned an overall financial health assessment of "GREAT" in InvestingPro’s metrics. For investors seeking further detail, a Pro Research Report on Frontdoor is available through an InvestingPro subscription.
Recent company results bolster the positive narrative. Frontdoor reported third-quarter 2025 earnings per share of $1.58, beating analyst expectations of $1.46 and representing an 8.22% surprise. Revenue for the quarter reached $618 million versus the $608.14 million analysts had projected.
Rating agencies have taken note of the trend. S&P Global Ratings revised its outlook on Frontdoor to positive from stable, while affirming the company’s 'BB-' rating. The change was attributed to consistent earnings growth and margin expansion. Frontdoor’s EBITDA margin for the 12 months ended September 30, 2025 hit a record-high 24.8%, up from 21.7% in the prior 12-month period.
Alongside the financial progress, the company received executive-level recognition: Kathy Collins, Frontdoor’s Senior Vice President and Chief Revenue Officer, was awarded a Silver Stevie Award for Female Executive of the Year in the Consumer Services category.
Taken together, the card-spend trends, recent earnings beats, improved margins and the company’s capital allocation activity form the basis for Truist’s reiterated Buy call and $71 price target.