One important metric to look for in a stock is an 80 or higher Relative Strength Rating. Frontdoor stock just hit that mark, with a jump from 80 to 83 Wednesday. The stock surged 15% Wednesday on positive third-quarter earnings results. Revenue rose 8% to $524 million. The home service plan provider is also raising its full-year 2023 outlook.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's unique RS Rating identifies market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock's price action over the trailing 52 weeks matches up against that of all other stocks.
History shows that the market's biggest winners typically have an RS Rating of above 80 as they launch their biggest runs.
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Is Frontdoor Stock A Buy?
Frontdoor stock surged on Wednesday amid positive Q3 results, reclaiming its 50- and 200-day moving average. However, now is not an ideal time to jump in since it isn't near a proper buy zone and the market trend is in correction.
While the company's bottom line growth decreased in the company's most recent quarterly report from 625% to 64%, revenue grew 8%, up from 7% in the prior report. Keep an eye out for the company's next round of numbers on or around Nov. 1.
Frontdoor stock earns the No. 4 rank among its peers in the Building-Maintenance & Services industry group. Rollins Inc and IES Holdings are also among the group's highest-rated stocks.
