FTDR - Frontdoor stock flies over 10% higher on earnings beat JP Morgan upgrade

2023-05-04 15:28:07 ET

Frontdoor press ( NASDAQ: FTDR ) shares surged about 14% higher on Thursday after topping Q1 expectations and fielding an analyst upgrade.

The Memphis-based home service provider posted $0.29 in earnings per share for the first quarter, more than tripling analyst expectations of $0.08. Meanwhile, a 4.6% jump in revenue year over year to $367M came in $6.26M above the Street consensus. Management credited a 10% increase in prices for offsetting about a 5% decline in business volume. Gross profit margin increased 540 basis points to 46% amid cost moderation and raised prices.

“Our first-quarter financial results were significantly better than expected as macroeconomic conditions continue to improve and our prior pricing actions and process improvement initiatives begin to take hold,” CEO Bill Cobb said. “Additionally, I am extremely excited about the launch of the new Frontdoor mobile app in April. I truly believe that our key differentiator, the live video chat feature with one of our experts, will change how homeowners maintain and repair their homes. Although it is still early in the year, we are delivering on our strategic objectives and look forward to progressing our business transformation throughout the rest of 2023.”

Management expects revenue in a range between $1.7B and $1.74B, in line with the $1.72B consensus. Gross profit margin is expected to range from 43.5% to 46.0%.

Based on the strength of the Q1 report and potential upside to guidance, JP Morgan stepped off the sideline and shifted to a Buy rating on the stock. The bank’s analysts also hiked their price target to $38 from a prior $30.

Shares of Frontdoor ( FTDR ) rose 13.8% in afternoon trading on earnings day .

For further details see: