Investors in Frontdoor, Inc. (NASDAQ:FTDR) had a good week, as its shares rose 6.3% to close at US$54.82 following the release of its third-quarter results. Revenues were US$540m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.30, an impressive 32% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Frontdoor after the latest results.

View our latest analysis for Frontdoor

Following the latest results, Frontdoor's six analysts are now forecasting revenues of US$1.91b in 2025. This would be a modest 4.4% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$3.07, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.94b and earnings per share (EPS) of US$2.88 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 11% to US$56.25. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Frontdoor at US$65.00 per share, while the most bearish prices it at US$46.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Frontdoor shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Frontdoor's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 6.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that Frontdoor is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Frontdoor following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Frontdoor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Frontdoor going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Frontdoor you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.