Resideo Technologies (REZI): Valuation Check After Smart Thermostat Launch and Planned ADI Business Separation

Resideo Technologies (REZI) just rolled out its Honeywell Home X8S smart thermostat, complete with live video streaming and a large touchscreen, while also outlining plans to separate its Products and Solutions and ADI Global Distribution operations.

See our latest analysis for Resideo Technologies.

Those moves seem to be landing well with investors, with the share price at $36.19 after a strong year to date share price return of 58.9 percent and a three year total shareholder return of 118.7 percent, suggesting momentum is building rather than fading.

If this kind of smart home story has you thinking more broadly about connected tech, it could be a good time to explore high growth tech and AI stocks for other potential standouts.

With new products rolling out and a planned business break up on the table, is Resideo still trading at a discount to its fundamentals, or are investors already paying up for all that future growth?

Most Popular Narrative Narrative: 12.8% Undervalued

With the narrative fair value at $41.50 versus the $36.19 last close, the valuation case leans positive and rests on some ambitious operating targets.

The planned separation of the ADI segment and portfolio optimization are set to sharpen strategic focus and resource allocation, enabling both entities to better address evolving industry needs and unlocking potential value, with positive implications for operating leverage, margin profile, and long-term earnings power.

Read the complete narrative.

Curious how modest top line growth, rising margins, and a re rating profits multiple can still justify a higher value today? See the full playbook behind this forecast fair value, including the earnings climb, margin reset, and valuation multiple the narrative believes the market will accept.

Result: Fair Value of $41.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside depends on Resideo outmaneuvering Big Tech rivals and proving its legacy Honeywell product base can keep pace with fast evolving smart home ecosystems.

Find out about the key risks to this Resideo Technologies narrative.

Build Your Own Resideo Technologies Narrative

If you see the story differently or want to test your own assumptions against the numbers, you can build a custom view in just a few minutes: Do it your way.

A great starting point for your Resideo Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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