It's been a pretty great week for Frontdoor, Inc. (NASDAQ:FTDR) shareholders, with its shares surging 12% to US$34.65 in the week since its latest first-quarter results. Revenues were US$378m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.43, an impressive 124% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Frontdoor

After the latest results, the seven analysts covering Frontdoor are now predicting revenues of US$1.83b in 2024. If met, this would reflect a satisfactory 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.5% to US$2.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.83b and earnings per share (EPS) of US$2.32 in 2024. So the consensus seems to have become somewhat more optimistic on Frontdoor's earnings potential following these results.

The consensus price target was unchanged at US$41.20, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Frontdoor analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$33.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Frontdoor's revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2024 being well below the historical 6.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Frontdoor's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Frontdoor analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Frontdoor that we have uncovered.

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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.