Is Frontdoor, Inc. overvalued or undervalued?

As of 1 May 2025, the valuation grade for Frontdoor, Inc. has moved from expensive to very expensive. This indicates that the company is currently overvalued. The key ratios highlight this situation, with a P/E ratio of 16, a Price to Book Value of 21.69, and an EV to EBITDA of 11.73. Comparatively, M.D.C. Holdings, Inc. has a P/E of 16.34 and an EV to EBITDA of 15.80, while Skyline Champion Corp. shows a higher P/E of 17.14 but a lower EV to EBITDA of 10.29.
Despite strong performance metrics such as a ROCE of 41.49% and an impressive ROE of 131.93%, the valuation suggests that Frontdoor, Inc. is priced at a premium relative to its peers. The stock has outperformed the S&P 500 over the past year, returning 66.28% compared to the index's 10.26%, but this strong performance does not justify its current valuation level.