FTDR
Frontdoor, Inc.
$75.31
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 29.0% below fair value
You pay
$75.31
Bear
$71.46
Fair
$106.05
Bull
$141.99
Bear
$71.46
-5.1%
7% stage 1 growth, 12% discount
Fair
$106.05
+40.8%
12% stage 1 growth, 12% discount
Bull
$141.99
+88.5%
16% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
37%
Implied Market Multiple
15.3x
Market is pricing in (growth)
7.1%
vs 12.4% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $69.33 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $106.05 per share.
Warnings
Wall Street's average price target is $69.33 (from 12 analysts). Our estimate is 66% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions