MeritValue

Frontdoor, Inc.

FTDRdata completeness 100%10 fiscal years on file
The thesis, from the filings

Frontdoor, Inc. earns about 35% on invested capital, far above its ~9% cost of capital, and has bought back 13% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $23.79 and $114.16 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.6B1$1.66B2$1.78B3$1.84B3$2.09B3
Net income$128M4$71M5$171M6$235M6$255M6
Operating cash flow$185M7$142M8$202M9$270M9$416M9
Capital expenditure$31M10$40M11$32M12$39M12$26M12
Free cash flow (derived)$154M7$102M8$170M9$231M9$390M9
Total debt—$609M13$593M14$1.2B15$1.17B15
Cash & equivalents$262M16$292M17$325M18$421M19$566M19
Diluted shares85.5M82.0M80.9M78.0M74.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$32.48
your share of equity
Profit it earned you last year
$34.23
Free cash flow it threw off
$52.35
Debt you’d be carrying
$157.45

10 shares is a claim on $32.48 of net worth that earned you $34.23 and generated $52.35 of cash last year, against $157.45 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
35% avg · 5y
FY21 —FY22 25%FY23 50%FY24 26%FY25 37%

It earned about 35% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−13% shares · 5y

Share count is down 13% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 93% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $23.79 and $114.16 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$114.16
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth14.5%
  • fcfBase$231M
DCF · Growth Exit 5Y
$73.22
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth14.5%
  • fcfBase$231M
Earnings Power Value
$23.79
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$171M
  • growthAssumed0.0%
Graham Number
$15.81
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years14.5%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $73.22
The three cases
Bear0.0%$36.15
Base14.5%$73.22
Bull19.5%$90.9

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 14.5%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001562762-24-000041 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-028375 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-076548 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001562762-24-000041 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-028375 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-076548 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001562762-24-000041 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-028375 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-076548 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001562762-24-000041 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-028375 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-076548 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-12-31 · accession 0001562762-24-000041 (LongTermDebt)
  14. 10-K · period ending 2023-12-31 · accession 0000950170-25-028375 (LongTermDebt)
  15. 10-K · period ending 2024-12-31 · accession 0001193125-26-076548 (LongTermDebt)
  16. 10-K · period ending 2021-12-31 · accession 0001562762-23-000062 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-12-31 · accession 0001562762-24-000041 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-31 · accession 0000950170-25-028375 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-12-31 · accession 0001193125-26-076548 (CashAndCashEquivalentsAtCarryingValue)