One-glance verdict
Within fair range
$10.14 our estimate vs market $19.39
Wall Street consensus: $34.25 (237.9% higher than our fair-value estimate)
91% above our estimate
Fundamentals snapshot
Resideo Technologies, Inc.
REZI · NYQ · Industrials · Industrial Distribution
Current price
$19.39
52-week range
$18.59 - $31.52
Market cap
$2.94B
Balance sheet
Stretched
4.75x Stretched
Net debt $3.35B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 2.4% last year.
- Reward Returns 15.2% on equity, ahead of 16% of its peers.
- Risk Forward P/E (9.4x) is higher than trailing (7.5x) - earnings are expected to drop.
- Risk Net debt grew 127.4% over 3 years.
What this company does
Resideo Technologies, Inc.
Resideo Technologies makes familiar smart home products like Honeywell Home thermostats and First Alert smoke alarms, but a bigger part of its business is distributing security and audio-visual equipment to professional installers. This combination means the company earns money both by selling its own branded items and by acting as a major middleman for the professional installation market.
How the company got here
Resideo was formed in 2018 when it was spun off from the large industrial company Honeywell. This means that Honeywell separated its 'Homes and ADI Global Distribution' business into a new, independent company, which then became Resideo. This move allowed Resideo to focus specifically on products and services for homes. Resideo's products have a long history, building on over 130 years of innovation from when they were part of Honeywell. The new company began trading on the New York Stock Exchange under the ticker symbol REZI.
What it actually does
Resideo makes and sells a wide range of products that help with comfort, safety, and security in homes and small businesses. You might recognize some of their brand names, like Honeywell Home, which they use under a long-term license, and First Alert. Their products include things like smart thermostats that control your heating and cooling, smoke and carbon monoxide detectors, security cameras, and water leak detectors. They sell these items to professionals like contractors and installers, as well as directly to consumers through retailers and online stores.
Products and Solutions
This part of the company focuses on creating and selling physical products for homes. This includes a variety of smart home devices designed to make your home more comfortable, safe, and energy-efficient. Think of items like thermostats that learn your schedule, security systems to protect your home, and detectors for smoke and carbon monoxide. This segment sells its products under well-known brand names such as Honeywell Home, First Alert, and Resideo. This is a significant part of Resideo's business, generating billions in sales.
ADI Global Distribution
This segment acts as a giant warehouse and distributor for low-voltage products, which are electrical products that use less power. ADI doesn't just sell Resideo's own products; it distributes items from over 1,000 different manufacturers. Their customers are professional installers and dealers who buy things like security systems, fire alarms, and audio-visual equipment for both homes and businesses. This business is a major contributor to Resideo's overall revenue (the total money the company makes from sales). However, Resideo has announced plans to separate ADI into its own independent company.
What management is betting on now
Resideo's main focus is to become a more streamlined company centered on its building technologies products. A key part of this strategy is the planned spin-off of its ADI Global Distribution business, which will allow the core Resideo business to concentrate on its products for home comfort and security. They are also investing in developing new and innovative products, particularly in the smart home area, to meet growing consumer demand. Management aims to increase the company's profitability and revenue by deepening relationships with professional installers and expanding their business in other countries.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$181.00M
FY2025 Q1
$-96.00M
FY2025 Q2
$180.00M
FY2025 Q3
$-1.60B
FY2025 Q4
$262.00M
FY2026 Q2
$-181.00M
FY2026 Q3
$119.00M
Revenue
$1.98B
Net income
$97.00M
Diluted EPS
0.51
Operating cash flow
$148.00M
Free cash flow
$119.00M
Fetching…
Sources
Revenue
$1.91B
Net income
$38.00M
Diluted EPS
0.17
Operating cash flow
$-145.00M
Free cash flow
$-181.00M
Fetching…
Sources
Revenue
$1.90B
Net income
$136.00M
Diluted EPS
0.99
Operating cash flow
$299.00M
Free cash flow
$262.00M
Fetching…
Sources
Revenue
$1.86B
Net income
$156.00M
Diluted EPS
0.85
Operating cash flow
$-1.57B
Free cash flow
$-1.60B
Fetching…
Sources
Revenue
$1.94B
Net income
$-825.00M
Diluted EPS
-5.59
Operating cash flow
$200.00M
Free cash flow
$180.00M
Fetching…
Sources
Revenue
$1.77B
Net income
$6.00M
Diluted EPS
-0.02
Operating cash flow
$-65.00M
Free cash flow
$-96.00M
Fetching…
Sources
Revenue
$1.86B
Net income
$23.00M
Diluted EPS
0.06
Operating cash flow
$203.00M
Free cash flow
$181.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $10.14 vs current price $19.39
Wall Street consensus is the average analyst price target: $34.25 (237.9% higher than our fair-value estimate).
Our most-likely fair value is $10.14 a share — about 47.7% away from today's price of $19.39, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $3.4B. Interest coverage 4.7x.
Net debt
$3.35B
Interest coverage
4.75x
Resideo Technologies, Inc.'s profit covers its interest bill about 4.7 times over.
Stretched
Worse cushion
Baseline
Better cushion
REZI
BASELINE
Resideo Technologies, Inc.
Total debt $3.90B Interest coverage 4.75x This is the baseline the peer rows are being compared against.
Total debt $567.47M Interest coverage 7.73x +63% vs REZI Carries about 1.6x more debt cushion than REZI.
Total debt $7.78B Interest coverage 2.85x -40% vs REZI Carries about 1.7x less debt cushion than REZI.
Total debt $11.00M Interest coverage 217.80x +4,487% vs REZI Carries about 45.9x more debt cushion than REZI.
Total debt $677.20M Interest coverage 53.93x +1,036% vs REZI Carries about 11.4x more debt cushion than REZI.
Total debt $2.22B Interest coverage 8.51x +79% vs REZI Carries about 1.8x more debt cushion than REZI.
What you should know
The case for and against REZI
3 Rewards
3 Risks
Rewards
-
Revenue grew 2.4% last year.
-
Returns 15.2% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Forward P/E (9.4x) is higher than trailing (7.5x) - earnings are expected to drop.
-
Net debt grew 127.4% over 3 years.
-
Operating margin compressed from 10.1% to 7.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
7.52x
Forward P/E
9.44x
P/B
1.16x
P/S
0.38x
EV/EBITDA
8.10x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
29.2%
Operating margin
7.9%
Net margin
5.6%
ROE
15.2%
ROA
4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
1.30x
Current ratio
2.22x
Quick ratio
1.03x
Total debt
$3.90B
Total cash
$551.00M
Growth
How the business has been compounding
Revenue TTM
$7.65B
Revenue 5Y CAGR
6.3%
EPS TTM
2.58
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-1.27B
Free CF TTM
$-1.25B
FCF margin
-16.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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