One-glance verdict
Within fair range
$17.65 our estimate vs market $16.46
Wall Street consensus: $31.40 (77.9% higher than our fair-value estimate)
7% below our estimate
Fundamentals snapshot
Resideo Technologies, Inc.
REZI · NYQ · Industrials · Industrial Distribution
Current price
$16.46
52-week range
$15.90 - $31.52
Market cap
$2.50B
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 Net debt grew 127.4% over 3 years.
- Risk Forward P/E (8.0x) is higher than trailing (6.9x) - earnings are expected to drop.
What this company does
Resideo Technologies, Inc.
Resideo makes and sells smart home products you might already know, like Honeywell Home thermostats and First Alert smoke detectors, along with security systems and water leak detectors. The company primarily makes money by selling these devices through professional installers and big retail stores. This means its success is often connected to the health of the housing market, since its products are bought for both new homes and existing home upgrades.
How the company got here
Resideo was created in 2018 when the large industrial company Honeywell decided to spin off its home comfort and security products business into a new, separate company. This move allowed Resideo to focus entirely on the smart home market. The new company started trading on the New York Stock Exchange under the ticker symbol REZI. Since becoming independent, Resideo has focused on growing its product offerings and has acquired smaller companies specializing in water leak prevention and energy efficiency technology.
What it actually does
Resideo makes and sells a wide range of products that help homeowners manage their comfort, safety, and energy use. You might recognize some of their well-known brands like Honeywell Home thermostats and First Alert smoke and carbon monoxide detectors. Their products include everything from heating and cooling controls and security cameras to water leak detectors and air purifiers. These items are sold to professional installers (like HVAC technicians and electricians), as well as directly to consumers through retailers and online stores.
Products and Solutions
This is the core of Resideo's business, where they design, manufacture, and sell their range of smart home and safety devices. This segment includes the thermostats, security systems, and smoke detectors that are found in millions of homes. The company makes money by selling these physical products to distributors, professional contractors, and major retailers. While it was previously one of two major segments, the company is focusing on this area to become a pure-play building technologies company.
ADI Global Distribution
This part of the company operates as a wholesale distributor of security and low-voltage products. Think of it as a large warehouse and sales operation that supplies professional installers with security cameras, fire alarms, and other related gear from various manufacturers, including Resideo's own products. This business makes money by buying products in bulk and selling them to a network of professional dealers and installers. However, Resideo has planned to spin off this distribution business to focus solely on its product-based building technology solutions.
What management is betting on now
Resideo's leadership is focused on becoming a more streamlined company centered on its core products for homes. A key part of this strategy is the planned separation of its ADI Global Distribution business, allowing Resideo to concentrate on creating and selling its own building technology products. They are also investing heavily in innovation to develop new and smarter products, aiming to increase the number of their devices in each home. The company plans to deepen its strong relationships with professional installers, who are a major channel for getting their products into homes, and also sees opportunities to expand its sales in international markets.
Price history
How the share price has moved
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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 $17.65 vs current price $16.46
Wall Street consensus is the average analyst price target: $31.40 (77.9% higher than our fair-value estimate).
Our most-likely fair value is $17.65 a share — about 7.2% away from today's price of $16.46, 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 $5.18M 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
-
Net debt grew 127.4% over 3 years.
-
Forward P/E (8.0x) is higher than trailing (6.9x) - earnings are expected to drop.
-
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)
6.92x
Forward P/E
8.01x
P/B
0.99x
P/S
0.33x
EV/EBITDA
7.57x
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
2.38
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
0.0%
Payout ratio
0.0%
Last ex-div date
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