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Resideo Technologies Inc (REZI)
NYSE:REZI
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Resideo Technologies
(NYSE:REZI)
Rating:76Outperform
Price Target:
$24.00
▲(15.55%Upside)
Positive Factors
Financial Performance
Revenue outperformed expectations, both businesses grew organically, and gross margins expanded more than expected.
Market Position
REZI is gaining more content spend per household and is ahead with new product introductions.
Negative Factors
Growth Targets
Organic growth has been flat to up slightly, well below the mid-single-digit growth targets set by management in 2021.
Tariff Risks
The biggest risk facing REZI is potential tariffs on imports from Mexico, where 50% of manufacturing is based.
Resideo Technologies (REZI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.07B
Dividend YieldN/A
Average Volume (3M)1.07M
Price to Earnings (P/E)52.6
Beta (1Y)1.45
Revenue Growth14.02%
EPS Growth-69.91%
CountryUS
Employees14,600
SectorIndustrials
Sector Strength93
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)0.63
Shares Outstanding148,503,540
10 Day Avg. Volume760,217
30 Day Avg. Volume1,073,764
Financial Highlights & Ratios
PEG Ratio-0.54
Price to Book (P/B)0.79
Price to Sales (P/S)0.00
P/FCF Ratio7.24
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.00Price Target Upside10.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Resideo Technologies Business Overview & Revenue Model
Company DescriptionResideo Technologies, Inc. develops, manufactures, and sells comfort, residential thermal, and security solutions to the commercial and residential end markets in the United States, Europe, and internationally. The company operates in two segments, Products & Solutions, and ADI Global Distribution. It offers temperature and humidity control, thermal water, and air solutions; and security panels, sensors, peripherals, wires and cables, communication devices, video cameras, awareness solutions, cloud infrastructure, installation and maintenance tools, and related software products under the Honeywell Home brand. In addition, the company distributes security products comprising video, intrusion, and access control products; and smart home, fire, power, audio, ProAV, networking, communication, wire and cable, enterprise connectivity, and structured wiring products to contractors that service non-residential and residential end-users. It sells its products through a network of distributors, original equipment manufacturers, and service providers, as well as retail and online channels. Resideo Technologies, Inc. was incorporated in 2018 and is headquartered in Scottsdale, Arizona.
How the Company Makes MoneyResideo Technologies generates revenue through the sale of its smart home products and services. The company's revenue streams primarily include the sale of connected devices for home environments, such as thermostats, security systems, and air purifiers. Additionally, Resideo offers professional installation and maintenance services, which contribute to its earnings. The company also benefits from strategic partnerships with major retailers and technology firms, which help expand its market reach and distribution capabilities. By leveraging its expertise in smart home technology, Resideo continues to capitalize on the growing demand for home automation and security solutions.
Resideo Technologies Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 18.89%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and revenue growth across key segments, supported by effective tariff mitigation strategies and product demand. However, challenges remain with tariff impacts and softness in specific categories.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Total net revenue of approximately $1.8 billion, including the impact of the Snap One acquisition, grew 19% year-over-year.
Significant Gross Margin Expansion
Total gross margin was 28.9%, up 200 basis points year-over-year, marking the eighth consecutive quarter of year-over-year gross margin expansion.
Record Growth in ADI Segment
The ADI team achieved 29% year-over-year growth in reported net revenue in the first quarter.
Positive Product and Solutions Performance
The Products and Solutions segment reported revenue growth of 5% year-over-year and 6% organic growth, with strong demand for new products.
Strong Adjusted EBITDA and Earnings Per Share
Total adjusted EBITDA grew 23% year-over-year to $168 million, and total adjusted earnings per share grew 34% year-over-year to $0.63.
Negative Updates
Challenges with Tariffs
The ADI segment is exposed to significant China tariffs given its purchasing profile, with an estimated maximum potential impact of 20-25% of ADI's total cost of goods sold.
Softness in Residential Audio Video Category
There was a low single-digit percentage decline in the residential audio video category, primarily due to a soft US residential market.
Company Guidance
During the Resideo 2025 First Quarter Earnings Call, the company reported strong financial performance, surpassing the high end of their quarterly outlook metrics. Total net revenue reached approximately $1.8 billion, a 19% year-over-year increase, with significant contributions from the Snap One acquisition. The gross margin expanded by 200 basis points to 28.9%, while adjusted EBITDA rose 23% to $168 million. Adjusted earnings per share grew by 34% to $0.63. The Products and Solutions segment saw 6% organic revenue growth, while the ADI segment achieved 4% organic growth despite fewer selling days. The company is navigating tariff impacts with strategic mitigation actions, including price increases and adjustments in sourcing. Resideo maintained its 2025 outlook, emphasizing strong execution and proactive strategies to handle dynamic market conditions.Resideo Technologies Financial Statement Overview
Summary
Resideo Technologies shows strong financial health with robust revenue growth and efficient cash flow management. However, the decline in net income and return on equity highlights areas for improvement. Maintaining operational efficiencies and managing leverage effectively will be key to future financial stability and growth.Income Statement
The company demonstrated solid revenue growth of 8.3% in 2024, continuing a positive trend from previous years. However, net income decreased significantly from 2023 to 2024, leading to a reduced net profit margin of 1.7%. The gross profit margin remained stable at 28.1%. EBIT and EBITDA margins are strong at 7.7% and 7.7% respectively, indicating operational efficiency despite the decline in net income.75
Positive
Balance Sheet
Resideo Technologies maintains a manageable debt-to-equity ratio of 0.60, slightly up from the previous year, indicating a responsible leverage level. The equity ratio improved to 40.3%, showing a strong equity base. However, the return on equity decreased to 3.5%, reflecting a decline in profitability relative to shareholders' equity.68
Positive
Cash Flow
The company achieved a 8.7% growth in free cash flow in 2024, showcasing effective cash management. The operating cash flow to net income ratio is high at 3.83, indicating strong cash generation relative to net income. Free cash flow to net income ratio also improved, demonstrating solid cash flow performance despite reduced net income.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.76B | 6.24B | 6.37B | 5.85B | 5.07B | Gross Profit |
| 1.90B | 1.70B | 1.77B | 1.56B | 1.31B | EBIT |
| 520.00M | 547.00M | 611.00M | 401.00M | 164.00M | EBITDA |
| 446.00M | 518.00M | 779.00M | 657.00M | 251.00M | Net Income Common Stockholders |
| 116.00M | 210.00M | 283.00M | 242.00M | 37.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 692.00M | 636.00M | 326.00M | 779.00M | 517.00M | Total Assets |
| 8.20B | 6.64B | 6.39B | 5.85B | 5.61B | Total Debt |
| 1.98B | 1.61B | 1.42B | 1.23B | 1.16B | Net Debt |
| 1.29B | 977.00M | 1.09B | 451.00M | 645.00M | Total Liabilities |
| 4.89B | 3.90B | 3.86B | 3.60B | 3.62B | Stockholders Equity |
| 3.31B | 2.75B | 2.53B | 2.25B | 1.99B |
| Cash Flow | Free Cash Flow | |||
| 364.00M | 335.00M | 67.00M | 252.00M | 174.00M | Operating Cash Flow |
| 444.00M | 440.00M | 152.00M | 315.00M | 244.00M | Investing Cash Flow |
| -1.41B | -44.00M | -764.00M | -65.00M | -103.00M | Financing Cash Flow |
| 1.03B | -64.00M | 170.00M | 20.00M | 253.00M |
Resideo Technologies Technical Analysis
Positive
20.77
Price Trends
17.97
Positive
19.44
Positive
20.70
Positive
Market Momentum
0.86
Positive
63.44
Neutral
62.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REZI, the sentiment is Positive. The current price of 20.77 is above the 20-day moving average (MA) of 19.93, above the 50-day MA of 17.97, and above the 200-day MA of 20.70, indicating a bullish trend. The MACD of 0.86 indicates Positive momentum. The RSI at 63.44 is Neutral, neither overbought nor oversold. The STOCH value of 62.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for REZI.
Resideo Technologies Risk Analysis
Resideo Technologies disclosed 28 risk factors in its most recent earnings report. Resideo Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The CD&R Stockholder holds a significant equity interest in our business and may exercise influence over us, including through its ability to designate up to two directors to our board of directors, and its interests as a preferred equity holder may diverge from, or even conflict with, the interests of our other holders of our common stock Q4, 2024
2.
The preferred stock issued in connection with the Snap One transaction has rights, preferences, and privileges that are not held by, and are preferential to, the rights of our common stock and has reduced the relative voting power of the holders of our common stock. Q4, 2024
3.
Uncertainty in the development, deployment, and use of artificial intelligence ("AI") in our products and services, as well as our business more broadly, could adversely affect our business and reputation. Q4, 2024
Resideo Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $999.09M | 22.82 | 27.48% | 1.70% | -1.05% | -2.78% | |
76 Outperform | $3.31B | 17.35 | 17.80% | 1.36% | 8.62% | 3.59% | |
76 Outperform | $3.07B | 52.62 | 2.58% | ― | 14.02% | -69.91% | |
75 Outperform | $1.42B | ― | -21.34% | ― | 0.27% | -18.75% | |
72 Outperform | $6.93B | 14.18 | 16.26% | 2.68% | -5.44% | -16.05% | |
68 Neutral | $3.54B | 22.64 | 54.50% | 1.16% | 1.97% | 41.88% | |
65 Neutral | $4.46B | 12.23 | 5.23% | 249.78% | 4.08% | -12.31% |
* Industrials Sector Average
Performance Comparison
REZI
Resideo Technologies
20.77
-0.79
-3.66%
BRC
Brady
70.19
3.73
5.61%
BCO
Brink's Company
82.66
-18.35
-18.17%
NSSC
Napco Security Technologies
28.02
-23.09
-45.18%
ADT
Adt
8.27
1.41
20.55%
ARLO
Arlo Technologies
13.75
-0.51
-3.58%
Resideo Technologies Corporate Events
Executive/Board Changes
Resideo Technologies Announces Departure of Key Executive
Neutral
Jan 17, 2025
On January 15, 2025, Resideo Technologies, Inc. announced that Tina Beskid, the Senior Vice President and Chief Accounting Officer, will have her employment terminated effective March 14, 2025. This decision entitles Ms. Beskid to severance under the company’s Severance Plan for Designated Officers.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.