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1. Company Snapshot

1.a. Company Description

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.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.

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1.b. Last Insights on REZI

Resideo Technologies' recent performance was negatively impacted by a disappointing quarterly report, which led to a re-rating of the stock. Despite strong margins and earnings per share, leverage remains high, with a leverage ratio of 3.5x. The company's business split and elimination of Honeywell indemnity payments have improved transparency and operational performance. However, slower revenue growth and high leverage are concerns. A spin-off of ADI Global Distribution is planned for 2026, which may improve focus and efficiency. Additionally, the company faces a fraud investigation.

1.c. Company Highlights

2. Resideo's Q3 2025 Earnings: A Strong Performance

Resideo reported a robust financial performance in the third quarter of 2025, with total net revenue reaching $1.86 billion, up 2% year-over-year. The company's gross margin expanded to 29.8%, a 110 basis point increase from the previous year. Adjusted earnings per share (EPS) came in at $0.89, exceeding the high end of the outlook range and surpassing analyst estimates of $0.71. Adjusted EBITDA reached $229 million, a 21% year-over-year increase, in line with the midpoint of the outlook range.

Publication Date: Nov -15

📋 Highlights
  • Record Adjusted EBITDA and Net Revenue: Adjusted EBITDA reached $229 million (up 21% YoY), with total net revenue at $1.86 billion (+2% YoY).
  • Margin Expansion and Profit Growth: Gross margin rose to 29.8% (+110 bps YoY); adjusted EPS hit $0.89 (up from $0.59 YoY).
  • Channel-Specific Growth: Retail sales surged, OEM revenue grew low double-digits YoY, and electrical distribution saw consistent growth.
  • 2025 Outlook Update: Revenue guided to $7.43–$7.47 billion; adjusted EBITDA to $818–$832 million; EPS to $2.57–$2.67.
  • Transitory Challenges Mitigated: ERP implementation impacts are largely resolved, with HVAC headwinds expected to fade by Q1 2026.

Segment Performance

The Products and Solutions (P&S) segment delivered another quarter of organic net revenue growth, with a 2% year-over-year increase. The retail channel experienced strong point-of-sales volumes, while the OEM channel posted low double-digit percentage revenue growth. ADI Global Distribution also reported a 2% net revenue growth, with most product categories growing at a low single-digit percentage year-over-year. According to Tom Surran, "The business delivered another quarter of organic net revenue growth, lapping a tough comparison."

Guidance and Outlook

Resideo adjusted its 2025 outlook, with total company net revenue expected to be in the range of $7.43 billion to $7.47 billion. The company also provided guidance for the fourth quarter of 2025. For 2026, analysts estimate revenue growth at 4.0%. Michael Carlet mentioned that the company is focused on driving margin and working capital efficiencies to offset recent incremental softness in residential HVAC.

Valuation and Future Prospects

With a current P/E Ratio of -7.69 and an EV/EBITDA of -29.23, the market appears to have factored in significant challenges for Resideo. However, the company's ROIC of 10.5% suggests a decent return on invested capital. As the company navigates transitory headwinds, including the HVAC regulatory change and ERP implementation, investors will be watching for progress in driving margin expansion and achieving its target of double-digit operating margins for ADI and 300-500 basis points of operating margin expansion for P&S over the next 3-5 years.

3. NewsRoom

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Resideo Redefines Smart Comfort with Launch of Honeywell Home X8S Smart Thermostat

Dec -03

Source: prnewswire.com

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Resideo Technologies, Inc. (NYSE:REZI) Given Average Rating of “Hold” by Brokerages

Dec -03

Source: defenseworld.net

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Resideo Announces Sale of Grid Services Demand Response Business to EnergyHub

Dec -02

Source: prnewswire.com

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EnergyHub Acquires Resideo Grid Services to Accelerate VPP Growth for Utilities

Dec -02

Source: businesswire.com

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Tweedy Browne's Strategic Moves: Alphabet Inc. Sees a -1.43% Portfolio Impact

Nov -20

Source: gurufocus.com

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Resideo Technologies, Inc. (REZI) Deep Dive Into ADI Global Distribution Business Post Spin Transcript

Nov -18

Source: seekingalpha.com

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Resideo Technologies, Inc. (REZI) Discusses P&S Operations and Financial Overview Transcript

Nov -15

Source: seekingalpha.com

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Resideo To Participate at Upcoming Investor Events

Nov -12

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.97%)

6. Segments

ADI Global Distribution

Expected Growth: 1.8%

ADI Global Distribution's 1.8% growth is driven by increasing demand for smart home security solutions, expansion into new geographic markets, and strategic partnerships with security dealers and integrators. Additionally, Resideo's focus on innovation and product development, such as its AI-powered security systems, contributes to the segment's growth.

Products and Solutions

Expected Growth: 2.2%

Resideo Technologies, Inc.'s 2.2% growth in Products and Solutions is driven by increasing demand for smart home solutions, growth in HVAC and security markets, and expanding distribution channels. Additionally, the company's focus on innovation, strategic partnerships, and cost savings initiatives contribute to its growth momentum.

7. Detailed Products

Honeywell Home T-Series Thermostats

A line of smart thermostats that learn and adapt to a home's temperature preferences to optimize energy efficiency and comfort.

Lyric Security and Home Control Systems

A comprehensive security and home automation system that integrates with various devices and sensors to provide a safe and convenient living experience.

ADT Pulse Security Systems

A smart security system that integrates with various devices and sensors to provide a safe and connected living experience.

First Alert Professional Security Systems

A line of security systems designed for professional installation and monitoring, providing a safe and secure living experience.

DIY Security Systems

A line of self-install security systems that provide a convenient and affordable way to secure a home.

Water Leak Detection Systems

A line of water leak detection systems that detect and alert homeowners to potential water leaks, preventing damage and waste.

Air Purification Systems

A line of air purification systems that remove pollutants and allergens from the air, improving indoor air quality.

8. Resideo Technologies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Resideo Technologies, Inc. faces moderate threat from substitutes due to the presence of alternative smart home solutions and security systems.

Bargaining Power Of Customers

Resideo Technologies, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Resideo Technologies, Inc. relies on a few key suppliers for components and manufacturing, giving them some bargaining power, but the company's size and scale mitigate this risk.

Threat Of New Entrants

The smart home and security systems market has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with Resideo Technologies, Inc.

Intensity Of Rivalry

The smart home and security systems market is highly competitive, with several established players, including ADT, Vivint, and Ring, which increases the intensity of rivalry for Resideo Technologies, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.49%
Debt Cost 9.89%
Equity Weight 65.51%
Equity Cost 14.56%
WACC 12.95%
Leverage 52.64%

11. Quality Control: Resideo Technologies, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ADT

A-Score: 6.9/10

Value: 7.4

Growth: 6.6

Quality: 6.4

Yield: 5.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Brady

A-Score: 5.9/10

Value: 3.8

Growth: 6.2

Quality: 7.6

Yield: 3.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
MSA Safety

A-Score: 5.3/10

Value: 2.6

Growth: 6.7

Quality: 6.6

Yield: 2.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Curtiss-Wright

A-Score: 5.2/10

Value: 1.2

Growth: 6.1

Quality: 6.9

Yield: 0.0

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Brinks

A-Score: 5.1/10

Value: 4.4

Growth: 6.7

Quality: 4.0

Yield: 2.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Resideo Technologies

A-Score: 5.1/10

Value: 7.3

Growth: 5.6

Quality: 3.7

Yield: 0.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.57$

Current Price

33.57$

Potential

-0.00%

Expected Cash-Flows