Resideo Technologies (NYSE:REZI) - Share price, News & Analysis

Q: What is the Fair Price of REZI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

REZI ($22.69) is trading below our estimate of [[fair value]] ($46.44)

REZI fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	1/6
Past Performance	4/6
Financial Health	3/6
Dividends	0/6

REZI Stock Overview

Rewards

Trading at 51.1% below our estimate of its fair value

Earnings are forecast to grow 11.13% per year

Earnings grew by 31.9% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Significant insider selling over the past 3 months

Resideo Technologies Competitors

AAON

NasdaqGS:AAON

US$3.3b

Armstrong World Industries

NYSE:AWI

US$4.3b

AZEK

NYSE:AZEK

US$3.2b

Hayward Holdings

NYSE:HAYW

US$2.6b

Price History & Performance

Summary of all time highs, changes and price drops for Resideo Technologies
Historical stock prices
Current Share Price	US$22.69
52 Week High	US$32.94
52 Week Low	US$18.36
Beta	2.18
1 Month Change	12.33%
3 Month Change	-1.99%
1 Year Change	-22.30%
3 Year Change	63.36%
5 Year Change	n/a
Change since IPO	-21.76%

Recent News & Updates

Aug 14

Resideo Technologies (NYSE:REZI) Has A Pretty Healthy Balance Sheet

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Aug 04

Resideo Technologies GAAP EPS of $0.63 beats by $0.07, revenue of $1.69B beats by $30M

Resideo Technologies press release (NYSE:REZI): Q2 GAAP EPS of $0.63 beats by $0.07. Revenue of $1.69B (+14.2% Y/Y) beats by $30M.

Jul 06

Resideo acquires Electronic Custom Distributors

Resideo Technologies (NYSE:REZI) has acquired privately held Electronic Custom Distributors based in Houston, Texas. ECD was founded in 1960 and is a leading regional distributor of residential audio, video, automation, security, wire and telecommunication products. ECD has four branch locations and a 30,000 sq. ft. distribution center and serves AV contractors across the Texas, Oklahoma, Louisiana and Arkansas region, and will be part of the company's ADI Global Distribution business. Terms of the transaction were not disclosed. "With a strong strategic plan in place, we continue to invest in ADI organically and by pursuing tuck-in acquisitions to bolster our growth and expand our customer and supplier relationships. ECD aligns with our strategy and marks the fifth acquisition for our distribution business since 2020. With an expanded product offering that includes private brands, we're confident this acquisition will help further accelerate diversified growth for ADI across the overall AV and Smart Home market." said Jay Geldmacher, President and CEO of Resideo.

Shareholder Returns

	REZI	US Building	US Market
7D	-0.5%	3.1%	1.1%
1Y	-22.3%	-13.8%	-9.0%

Return vs Industry: REZI underperformed the US Building industry which returned -13.1% over the past year.

Return vs Market: REZI underperformed the US Market which returned -8.9% over the past year.

Price Volatility

Is REZI's price volatile compared to industry and market?
REZI volatility
REZI Average Weekly Movement	5.6%
Building Industry Average Movement	5.9%
Market Average Movement	7.6%
10% most volatile stocks in US Market	17.0%
10% least volatile stocks in US Market	3.1%

Stable Share Price: REZI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: REZI's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2018	13,300	Jay Geldmacher	https://www.resideo.com

Resideo 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.

Resideo Technologies Fundamentals Summary

How do Resideo Technologies's earnings and revenue compare to its market cap?
REZI fundamental statistics
Market Cap	US$3.31b
Earnings (TTM)	US$316.00m
Revenue (TTM)	US$6.14b

10.5x

P/E Ratio

0.5x

P/S Ratio

Is REZI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
REZI income statement (TTM)
Revenue	US$6.14b
Cost of Revenue	US$4.44b
Gross Profit	US$1.71b
Other Expenses	US$1.39b
Earnings	US$316.00m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.17
Gross Margin	27.76%
Net Profit Margin	5.14%
Debt/Equity Ratio	59.4%

How did REZI perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is REZI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for REZI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for REZI. This is calculated by dividing REZI's market cap by their current preferred multiple.
What is REZI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.31b

REZI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.8x
Enterprise Value/EBITDA	6.1x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does REZI's PE Ratio compare to its peers?

REZI PE Ratio vs Peers

The above table shows the PE ratio for REZI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30.4x
AAON AAON	59.9x	50.5%	US$3.3b
AWI Armstrong World Industries	22.9x	15.1%	US$4.3b
AZEK AZEK	27.4x	20.0%	US$3.2b
HAYW Hayward Holdings	11.3x	1.2%	US$2.6b
REZI Resideo Technologies	10.5x	11.1%	US$3.3b

Price-To-Earnings vs Peers: REZI is good value based on its Price-To-Earnings Ratio (10.5x) compared to the peer average (30.4x).

Price to Earnings Ratio vs Industry

How does REZI's PE Ratio compare vs other companies in the US Building Industry?

Price-To-Earnings vs Industry: REZI is good value based on its Price-To-Earnings Ratio (10.5x) compared to the US Building industry average (18.4x)

Price to Earnings Ratio vs Fair Ratio

What is REZI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

REZI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.5x
Fair PE Ratio	19.9x

Price-To-Earnings vs Fair Ratio: REZI is good value based on its Price-To-Earnings Ratio (10.5x) compared to the estimated Fair Price-To-Earnings Ratio (19.9x).

Share Price vs Fair Value

What is the Fair Price of REZI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: REZI ($22.69) is trading below our estimate of fair value ($46.44)

Significantly Below Fair Value: REZI is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Resideo Technologies forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: REZI's forecast earnings growth (11.1% per year) is above the savings rate (1.9%).

Earnings vs Market: REZI's earnings (11.1% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: REZI's earnings are forecast to grow, but not significantly.

Revenue vs Market: REZI's revenue (5.1% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: REZI's revenue (5.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: REZI's Return on Equity is forecast to be low in 3 years time (16.5%).

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Past Performance

How has Resideo Technologies performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

46.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: REZI has high quality earnings.

Growing Profit Margin: REZI's current net profit margins (5.1%) are higher than last year (4.2%).

Past Earnings Growth Analysis

Earnings Trend: REZI has become profitable over the past 5 years, growing earnings by 46.3% per year.

Accelerating Growth: REZI's earnings growth over the past year (31.9%) is below its 5-year average (46.3% per year).

Earnings vs Industry: REZI earnings growth over the past year (31.9%) exceeded the Building industry 19.9%.

Return on Equity

High ROE: REZI's Return on Equity (13.2%) is considered low.

Discover strong past performing companies

Financial Health

How is Resideo Technologies's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: REZI's short term assets ($2.5B) exceed its short term liabilities ($1.6B).

Long Term Liabilities: REZI's short term assets ($2.5B) exceed its long term liabilities ($2.3B).

Debt to Equity History and Analysis

Debt Level: REZI's net debt to equity ratio (48.9%) is considered high.

Reducing Debt: REZI's debt to equity ratio has increased from 0.02% to 59.4% over the past 5 years.

Debt Coverage: REZI's debt is not well covered by operating cash flow (13.5%).

Interest Coverage: REZI's interest payments on its debt are well covered by EBIT (14.1x coverage).

Balance Sheet

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Dividend

What is Resideo Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate REZI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate REZI's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if REZI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if REZI's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as REZI has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure

CEO

Jay Geldmacher (66 yo)

2.25yrs

Tenure

US$14,103,270

Compensation

Mr. Jay L. Geldmacher has been Chief Executive Officer, President and Director at Resideo Technologies, Inc. since May 28, 2020. Since September 2019, Mr. Geldmacher has served as President and CEO of Elec...

CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD14.10M) is above average for companies of similar size in the US market ($USD6.57M).

Compensation vs Earnings: Jay's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: REZI's management team is considered experienced (2 years average tenure).

Board Members

Experienced Board: REZI's board of directors are considered experienced (4.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: REZI insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/07/02
Annual Earnings	2021/12/31