Frontdoor's (FTDR) growth outlook is improving as membership growth turns positive, retention reaches record levels and new growth vectors emerge, Oppenheimer said in a note Thursday.
Top-line growth should reach the mid-to-high-single-digit range as the company shifts its focus toward volume after years of price resets to offset inflation, the firm said. Membership growth turned positive, up 1% year over year in Q2, while retention reached 79.6%, the firm said.
Oppenheimer said HVAC upgrades and tune-ups, along with 2-10's new home builder warranties and relationships with small and medium-sized builders, have added growth vectors.
The brokerage said that overall, the management was upbeat at its meetings, adding that its strategy has started to play out.
Oppenheimer maintained the company's outperform rating and $100 price target.
Price: $82.80, Change: $+1.74, Percent Change: +2.15%