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Are Investors Undervaluing Frontdoor (FTDR) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Frontdoor (FTDR - Free Report) . FTDR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.77, while its industry has an average P/E of 18.26. Over the past 52 weeks, FTDR's Forward P/E has been as high as 24.33 and as low as 12.61, with a median of 16.82.

Investors should also note that FTDR holds a PEG ratio of 0.92. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FTDR's industry currently sports an average PEG of 1.54.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FTDR has a P/S ratio of 1.36. This compares to its industry's average P/S of 1.66.

Finally, our model also underscores that FTDR has a P/CF ratio of 11.85. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. FTDR's current P/CF looks attractive when compared to its industry's average P/CF of 23.79. Over the past 52 weeks, FTDR's P/CF has been as high as 18.83 and as low as 10.98, with a median of 13.93.

These are just a handful of the figures considered in Frontdoor's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FTDR is an impressive value stock right now.


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