Is Frontdoor, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Frontdoor, Inc. has moved from fair to very expensive, indicating a significant shift in its perceived value. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 16, which is higher than the industry average, and an EV to EBITDA ratio of 11.73. Additionally, the PEG ratio stands at 0.39, suggesting that despite growth potential, the stock may not be justified at its current price.
In comparison to its peers, Frontdoor, Inc. has a higher P/E ratio than Toll Brothers, Inc. at 11.10 and Taylor Morrison Home Corp. at 10.67, both of which are considered fairly valued or attractive. Furthermore, while Frontdoor has shown impressive returns over the long term, such as a 204.91% return over three years compared to the S&P 500's 70.41%, its recent performance has lagged, with a 1-week return of -0.24% against the S&P 500's 1.05%. This combination of high valuation ratios and relative performance suggests that Frontdoor, Inc. is currently overvalued.