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On October 2, 2025 Frontdoor marked National Home Warranty Day, highlighting consumer education initiatives and remarks from Chief Revenue Officer Kathy Collins about the value of warranty coverage for homeowners.
Technical Analysis
ADX at 14.92 indicates no dominant trend, which reduces conviction in breakout or breakdown scenarios; this low trend strength tempers near-term directional bias versus the valuation gap identified by WMDST.
Directional indicators show bearish alignment: DI+ recorded 25.71 with a peak & reversal (DI+ decreasing) while DI‑ registered 22.29 with a dip & reversal (DI‑ increasing). That combination favors downside pressure against the current valuation baseline.
MACD near 0.58 sits below its signal line at 0.71 and shows a peak & reversal, signaling bearish momentum; that momentum signal increases the probability of short-term retracement from recent highs unless MACD recovers above the signal line.
MRO at −11.88 carries a negative reading, which implies the market price sits below the oscillator’s target and therefore leaves scope for mean reversion toward intrinsic value as liquidity conditions permit.
RSI at 55.67 with a peak & reversal indicates reduced upside momentum after a recent high; the RSI level remains neutral-to-favorable for either a consolidation phase or a pullback before any resumed advance.
Price structure shows the close at $66.43 slightly below the 20-day average ($67.09) and 12-day EMA/Kijun/Tenkan at $67.17, while remaining above the 50-day average ($65.60) and well above the 200-day average ($55.50). Ichimoku Senkou A at $64.34 and Senkou B at $59.80 place the price above the cloud, supporting longer-term constructive context even as short-term averages and momentum suggest pullback risk.
Bands and volatility: the stock trades near the lower Bollinger band (lower 1σ at $65.55) with subdued 42-day volatility (0.02). Volume ran above the 10-day average but below the 200-day average, signaling episodic interest without broad-based accumulation.
Fundamental Analysis
Revenue and margins: total revenue recorded $617,000,000. YoY revenue growth measured 4.13% while the available quarter-over-quarter growth metric reads 311.96%. Gross margin at 57.70% improved YoY by 2.20 percentage points; operating margin at 26.26% rose QoQ by 66.55% and YoY by 6.20 percentage points, reflecting expanding operating leverage.
Profitability and earnings: EBIT totaled $166,000,000 with an EBIT margin of 26.90%, above the industry peer mean of 22.57% and the industry peer median of 21.44%. EPS for the reported period came in at $1.63 versus an estimate of $1.45, representing an EPS surprise of 12.41%.
Cash flow and liquidity: cash and short-term investments stood at $562,000,000 and operating cash flow registered $127,000,000. Free cash flow reached $120,000,000 with a free cash flow yield of 2.86%, above the industry peer mean free cash flow yield of 1.65%. The cash conversion ratio of 3.02 and a cashFlowToEarnings of 1.47 indicate healthy cash generation relative to reported earnings.
Balance sheet and leverage: total debt equals $1,205,000,000 with net debt of $624,000,000. Debt-to-assets measured 55.48%, higher than the industry peer mean of 42.28%, while debt-to-equity at 4.76x sits below the industry peer mean of 8.12x. The current ratio at 1.49 remains above the industry peer mean of 0.69, and the cash ratio of 1.35 shows ample short-term liquidity.
Returns and efficiency: return on equity stands at 43.87% while return on assets registers 5.17%. Asset turnover at 0.287 exceeds the industry peer mean of 0.173, supporting revenue generation from invested assets. Earnings growth shows mixed timing: an overall earnings growth metric at 154.69% and a YoY earnings change of −17.997% appear in the provided series; interpret relative momentum alongside cash flow strength rather than as a sole driver of valuation.
Valuation view: WMDST values the stock as under-valued. Multiples include a trailing PE of 34.26 and a price-to-book near 16.59; forward PE sits higher at 67.19 based on the provided forward EPS. Enterprise value equals $4,841,366,341 with an EV/R multiple of 7.85. WMDST’s under-valued designation reflects the combination of strong margin profile, positive cash generation, and cash balances relative to enterprise value.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-06-30 |
| REPORT DATE: | 2025-08-05 |
| NEXT REPORT DATE: | 2025-10-30 |
| CASH FLOW | Begin Period Cash Flow | $ 506.0 M |
| Operating Cash Flow | $ 127.0 M | |
| Capital Expenditures | $ -7.00 M | |
| Change In Working Capital | $ -11.00 M | |
| Dividends Paid | — | |
| Cash Flow Delta | $ 56.0 M | |
| End Period Cash Flow | $ 562.0 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 617.0 M | |
| Forward Revenue | $ 79.8 M | |
| COSTS | ||
| Cost Of Revenue | $ 261.0 M | |
| Depreciation | $ 9.0 M | |
| Depreciation and Amortization | $ 21.0 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 455.0 M | |
| PROFITABILITY | ||
| Gross Profit | $ 356.0 M | |
| EBITDA | $ 187.0 M | |
| EBIT | $ 166.0 M | |
| Operating Income | $ 162.0 M | |
| Interest Income | $ 4.0 M | |
| Interest Expense | $ 20.0 M | |
| Net Interest Income | $ -16.00 M | |
| Income Before Tax | $ 146.0 M | |
| Tax Provision | $ 36.0 M | |
| Tax Rate | 24.3 % | |
| Net Income | $ 111.0 M | |
| Net Income From Continuing Operations | $ 111.0 M | |
| EARNINGS | ||
| EPS Estimate | $ 1.45 | |
| EPS Actual | $ 1.63 | |
| EPS Difference | $ 0.18 | |
| EPS Surprise | 12.414 % | |
| Forward EPS | $ 0.79 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 2.2 B | |
| Intangible Assets | $ 1.4 B | |
| Net Tangible Assets | $ -1.13 B | |
| Total Current Assets | $ 620.0 M | |
| Cash and Short-Term Investments | $ 562.0 M | |
| Cash | $ 562.0 M | |
| Net Receivables | $ 10.0 M | |
| Inventory | — | |
| Long-Term Investments | $ 3.0 M | |
| LIABILITIES | ||
| Accounts Payable | $ 106.0 M | |
| Short-Term Debt | $ 29.0 M | |
| Total Current Liabilities | $ 416.0 M | |
| Net Debt | $ 624.0 M | |
| Total Debt | $ 1.2 B | |
| Total Liabilities | $ 1.9 B | |
| EQUITY | ||
| Total Equity | $ 253.0 M | |
| Retained Earnings | $ 678.0 M | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 3.46 | |
| Shares Outstanding | 73.111 M | |
| Revenue Per-Share | $ 8.44 | |
| VALUATION | Market Capitalization | $ 4.2 B |
| Enterprise Value | $ 4.8 B | |
| Enterprise Multiple | 25.89 | |
| Enterprise Multiple QoQ | -41.254 % | |
| Enterprise Multiple YoY | 59.169 % | |
| Enterprise Multiple IPRWA | high: 77.32 median: 51.0 mean: 49.029 FTDR: 25.89 low: -5.653 |
|
| EV/R | 7.847 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 8.585 | |
| Asset To Liability | 1.132 | |
| Debt To Capital | 0.826 | |
| Debt To Assets | 0.555 | |
| Debt To Assets QoQ | -2.992 % | |
| Debt To Assets YoY | 3815.243 % | |
| Debt To Assets IPRWA | high: 0.816 FTDR: 0.555 median: 0.447 mean: 0.423 low: 0.28 |
|
| Debt To Equity | 4.763 | |
| Debt To Equity QoQ | -22.255 % | |
| Debt To Equity YoY | 5923.587 % | |
| Debt To Equity IPRWA | high: 22.782 mean: 8.122 FTDR: 4.763 median: 3.23 low: -2.487 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 16.594 | |
| Price To Book QoQ | 0.808 % | |
| Price To Book YoY | 30.785 % | |
| Price To Book IPRWA | high: 81.141 mean: 27.03 FTDR: 16.594 median: 7.156 low: -0.498 |
|
| Price To Earnings (P/E) | 34.256 | |
| Price To Earnings QoQ | -50.038 % | |
| Price To Earnings YoY | 22.876 % | |
| Price To Earnings IPRWA | high: 111.689 median: 89.426 mean: 76.445 FTDR: 34.256 low: 24.552 |
|
| PE/G Ratio | 0.221 | |
| Price To Sales (P/S) | 6.804 | |
| Price To Sales QoQ | -11.273 % | |
| Price To Sales YoY | 35.194 % | |
| Price To Sales IPRWA | high: 10.477 median: 9.349 mean: 8.972 FTDR: 6.804 low: 0.239 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 67.188 | |
| Forward PE/G | 0.434 | |
| Forward P/S | 52.641 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 3.271 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.287 | |
| Asset Turnover Ratio QoQ | 42.977 % | |
| Asset Turnover Ratio YoY | -37.792 % | |
| Asset Turnover Ratio IPRWA | high: 0.628 FTDR: 0.287 median: 0.189 mean: 0.173 low: 0.06 |
|
| Receivables Turnover | 58.762 | |
| Receivables Turnover Ratio QoQ | 45.176 % | |
| Receivables Turnover Ratio YoY | -40.371 % | |
| Receivables Turnover Ratio IPRWA | FTDR: 58.762 high: 14.978 median: 14.978 mean: 10.278 low: 3.022 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 1.553 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | — | |
| Cash Conversion Cycle Days QoQ | — | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | — | |
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 3.025 | |
| CapEx To Revenue | -0.011 | |
| CapEx To Depreciation | -0.778 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 1.4 B | |
| Net Invested Capital | $ 1.4 B | |
| Invested Capital | $ 1.4 B | |
| Net Tangible Assets | $ -1.13 B | |
| Net Working Capital | $ 204.0 M | |
| LIQUIDITY | ||
| Cash Ratio | 1.351 | |
| Current Ratio | 1.49 | |
| Current Ratio QoQ | 11.375 % | |
| Current Ratio YoY | 17.492 % | |
| Current Ratio IPRWA | FTDR: 1.49 high: 1.059 mean: 0.689 median: 0.609 low: 0.341 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 6.444 | |
| Cost Of Debt | 1.246 % | |
| Interest Coverage Ratio | 8.3 | |
| Interest Coverage Ratio QoQ | 135.373 % | |
| Interest Coverage Ratio YoY | -38.06 % | |
| Interest Coverage Ratio IPRWA | high: 24.236 mean: 10.521 FTDR: 8.3 median: 8.153 low: -2.856 |
|
| Operating Cash Flow Ratio | 0.392 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 43.475 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 2.405 % | |
| Revenue Growth | 45.176 % | |
| Revenue Growth QoQ | 311.964 % | |
| Revenue Growth YoY | 4.126 % | |
| Revenue Growth IPRWA | FTDR: 45.176 % high: 10.254 % median: -0.812 % mean: -12.104 % low: -51.209 % |
|
| Earnings Growth | 154.687 % | |
| Earnings Growth QoQ | 12.88 % | |
| Earnings Growth YoY | -17.997 % | |
| Earnings Growth IPRWA | FTDR: 154.687 % high: 38.961 % median: -10.204 % mean: -10.823 % low: -57.807 % |
|
| MARGINS | ||
| Gross Margin | 57.699 % | |
| Gross Margin QoQ | 4.349 % | |
| Gross Margin YoY | 2.198 % | |
| Gross Margin IPRWA | high: 92.339 % FTDR: 57.699 % mean: 33.001 % median: 25.477 % low: 24.953 % |
|
| EBIT Margin | 26.904 % | |
| EBIT Margin QoQ | 70.657 % | |
| EBIT Margin YoY | 8.822 % | |
| EBIT Margin IPRWA | high: 34.528 % FTDR: 26.904 % mean: 22.572 % median: 21.435 % low: -26.956 % |
|
| Return On Sales (ROS) | 26.256 % | |
| Return On Sales QoQ | 66.546 % | |
| Return On Sales YoY | 6.201 % | |
| Return On Sales IPRWA | high: 33.418 % FTDR: 26.256 % mean: 22.007 % median: 20.834 % low: -27.56 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 120.0 M | |
| Free Cash Flow Yield | 2.858 % | |
| Free Cash Flow Yield QoQ | -20.39 % | |
| Free Cash Flow Yield YoY | -14.329 % | |
| Free Cash Flow Yield IPRWA | high: 3.345 % FTDR: 2.858 % median: 1.687 % mean: 1.649 % low: 0.587 % |
|
| Free Cash Growth | 2.564 % | |
| Free Cash Growth QoQ | -98.087 % | |
| Free Cash Growth YoY | -88.839 % | |
| Free Cash Growth IPRWA | high: 62.634 % FTDR: 2.564 % mean: -38.036 % median: -70.732 % low: -383.68 % |
|
| Free Cash To Net Income | 1.081 | |
| Cash Flow Margin | 26.418 % | |
| Cash Flow To Earnings | 1.468 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | 5.171 % | |
| Return On Assets QoQ | 195.486 % | |
| Return On Assets YoY | -34.069 % | |
| Return On Assets IPRWA | high: 9.201 % FTDR: 5.171 % mean: 3.255 % median: 1.415 % low: -23.083 % |
|
| Return On Capital Employed (ROCE) | 9.453 % | |
| Return On Equity (ROE) | 0.439 | |
| Return On Equity QoQ | 134.784 % | |
| Return On Equity YoY | 2.531 % | |
| Return On Equity IPRWA | high: 3.368 mean: 0.983 FTDR: 0.439 median: 0.079 low: 0.039 |
|
| DuPont ROE | 49.222 % | |
| Return On Invested Capital (ROIC) | 8.691 % | |
| Return On Invested Capital QoQ | 134.069 % | |
| Return On Invested Capital YoY | -135.139 % | |
| Return On Invested Capital IPRWA | high: 19.805 % FTDR: 8.691 % mean: 7.398 % median: 2.717 % low: -31.748 % |
|