Have you been paying attention to shares of Frontdoor (FTDR)? Shares have been on the move with the stock up 20.6% over the past month. The stock hit a new 52-week high of $93.43 in the previous session. Frontdoor has gained 57.4% since the start of the year compared to the 11.7% gain for the Zacks Construction sector and the 5.6% return for the Zacks Building Products - Miscellaneous industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 6, 2026, Frontdoor reported EPS of $1.93 versus consensus estimate of $1.78 while it beat the consensus revenue estimate by 0.44%.
For the current fiscal year, Frontdoor is expected to post earnings of $4.66 per share on $2.18 in revenues. This represents a 13.94% change in EPS on a 4.2% change in revenues. For the next fiscal year, the company is expected to earn $5.12 per share on $2.3 in revenues. This represents a year-over-year change of 9.94% and 5.58%, respectively.
Valuation Metrics
Though Frontdoor has recently hit a 52-week high, what is next for Frontdoor? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Frontdoor has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 19.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 16.6X versus its peer group's average of 13X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Frontdoor currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Frontdoor meets the list of requirements. Thus, it seems as though Frontdoor shares could have potential in the weeks and months to come.
How Does FTDR Stack Up to the Competition?
Shares of FTDR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is United Rentals, Inc. (URI). URI has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. United Rentals, Inc. beat our consensus estimate by 9.34%, and for the current fiscal year, URI is expected to post earnings of $48.55 per share on revenue of $17.65 billion.
Shares of United Rentals, Inc. have gained 6.1% over the past month, and currently trade at a forward P/E of 23.95X and a P/CF of 12.54X.
The Building Products - Miscellaneous industry may rank in the bottom 68% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for FTDR and URI, even beyond their own solid fundamental situation.
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