Resideo Technologies Shares Drop on Q2 Guidance Miss
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy REZI?
Source: Fool
Resideo Technologies Inc. shares fell 15.5% after the company provided second-quarter guidance that missed Wall Street expectations, hitting a 20-day low.
The decline was primarily driven by a guidance downgrade, with net revenue expectations for Q2 set between $1.916 billion and $1.94 billion, below the anticipated $1.978 billion. Additionally, gross margins decreased to 27.76% due to rising freight and fuel costs, exacerbated by geopolitical tensions affecting oil prices. This has raised concerns about the high-end residential audio-visual market's softness, leading to a negative market reaction despite the company beating first-quarter estimates.
The implications of this guidance miss could lead to increased scrutiny from investors, particularly regarding the company's ability to manage costs and maintain margins in a challenging economic environment. Resideo's management plans to implement price increases to counteract rising costs, but the overall market sentiment remains cautious.
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Analyst Views on REZI
Wall Street analysts forecast REZI stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 30.080
Low
42.00
Averages
45.00
High
48.00
Current: 30.080
Low
42.00
Averages
45.00
High
48.00
About REZI
Resideo Technologies, Inc. is a manufacturer and distributor of technology-driven sensing and controls products and solutions for residential and commercial end-markets. The Company’s segments include Products and Solutions and ADI Global Distribution. The Products and Solutions segment offers temperature and humidity control, water and air solutions, smoke and carbon monoxide detection, home safety products, residential and small business security products, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. The ADI Global Distribution segment distributes low-voltage products including security, fire, and access control, and participates significantly in the broader related markets of smart home, residential audiovisual, professional audiovisual, power management, networking, data communications, wire and cable, enterprise connectivity, and structured wiring products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Resideo Technologies to Participate in Upcoming Investor Conferences
- Investor Conference Schedule: Resideo Technologies is set to participate in the JP Morgan 2026 Global Technology, Media, and Communications Conference in Boston on May 18, 2026, where CFO Michael Carlet will engage in a fireside chat at 3:30 PM ET, highlighting the company's leadership in technology-driven products.
- Multiple Conference Engagements: Additionally, Resideo will attend Baird's 2026 Global Consumer, Technology, and Services Conference in New York on June 2, 2026, with Carlet participating in a fireside chat at 12:15 PM ET, further enhancing investor relations.
- Industry Influence Showcase: At the Wells Fargo 16th Annual Industrials & Materials Conference in Chicago on June 10, 2026, Carlet will conduct a fireside chat at 9:30 AM CT, showcasing Resideo's significant impact in the home safety and controls market.
- Live Streaming and Replay: All fireside chats will be webcast live on Resideo's Investor Relations page and available for replay for 30 days, ensuring investors stay informed about the company's latest developments and strategic direction.
See More
Resideo Technologies Shares Plunge 15.5% on Q2 Guidance Miss
- Guidance Downgrade: Resideo Technologies' shares fell 15.5% after the company provided second-quarter guidance of $1.916 billion to $1.94 billion in net revenue, which was below Wall Street's expectation of $1.978 billion, despite beating first-quarter estimates.
- Margin Pressure: The gross margin has decreased to 27.76% due to rising freight and fuel costs, which is not surprising given the soaring oil prices caused by the closure of the Strait of Hormuz, leading to significant market concerns regarding the softening high-end residential audio-visual market.
- Price Increase Strategy: Management intends to raise prices to offset these cost increases while maintaining full-year revenue guidance of $7.8 billion to $7.9 billion; however, the market reacted negatively to the lowered adjusted EPS expectations from $0.84 to a range of $0.71 to $0.75.
- Uncertain Market Outlook: Although management believes that price increases will mitigate cost pressures, the weakness in the high-end residential market remains a concern, and a quick resolution to the ongoing conflict, along with successful price adjustments, could potentially restore investor confidence in the stock.
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- Resideo Earnings Guidance Miss: Resideo's shares plunged nearly 9% after guiding for current-quarter adjusted earnings between 71 to 75 cents per share, below the analyst expectation of 84 cents, despite beating first-quarter estimates, indicating potential investor concerns about future performance.
See More
Resideo Q1 2026 Earnings Exceed Expectations
- Significant Revenue Growth: Resideo's total net revenue for Q1 increased by 8% year-over-year to over $1.9 billion, exceeding the high end of the company's outlook range, indicating strong market demand and effective cost management.
- Adjusted EBITDA Increase: Adjusted EBITDA grew by 28% year-over-year to $215 million, reflecting the company's success in enhancing operational efficiency and controlling costs, which boosts confidence in future profitability.
- Separation Progress: The company has completed the public filing of ADI's Form 10, with the spinoff expected to be finalized between mid-Q3 and mid-Q4, marking a key milestone in the company's strategic restructuring and enhancing investor confidence in future growth.
- Optimistic Outlook: CFO Carlet reaffirmed the 2026 performance outlook, projecting Q2 net revenue to be in the range of $1.916 billion to $1.940 billion, and while facing rising cost challenges, the company plans to implement price adjustments in Q2 to mitigate inflationary pressures.
See More
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- Significant Revenue Growth: Resideo achieved net revenue of $1.912 billion in Q1 2026, an 8% year-over-year increase, with the Products & Solutions segment generating $706 million, reflecting strong performance in a dynamic macroeconomic environment.
- Adjusted EBITDA Improvement: The first quarter adjusted EBITDA reached $215 million, a 28% increase year-over-year, indicating successful operational efficiency and cost control, which bolsters confidence in future growth.
- Cash Flow Management: Despite an increase in cash used by operating activities to $145 million, the company maintained $438 million in cash and cash equivalents, demonstrating effective liquidity management.
- Optimistic Outlook: Resideo reaffirms its full-year 2026 outlook, projecting second-quarter net revenue between $1.916 billion and $1.940 billion, indicating confidence in future market demand and sustained growth potential.
See More
Resideo Technologies to Participate in Upcoming Investor Conferences
- Investor Conference Schedule: Resideo Technologies is set to participate in the JP Morgan 2026 Global Technology, Media, and Communications Conference in Boston on May 18, 2026, where CFO Michael Carlet will engage in a fireside chat at 3:30 PM ET, highlighting the company's leadership in technology-driven products.
- Multiple Conference Engagements: Additionally, Resideo will attend Baird's 2026 Global Consumer, Technology, and Services Conference in New York on June 2, 2026, with Carlet participating in a fireside chat at 12:15 PM ET, further enhancing investor relations.
- Industry Influence Showcase: At the Wells Fargo 16th Annual Industrials & Materials Conference in Chicago on June 10, 2026, Carlet will conduct a fireside chat at 9:30 AM CT, showcasing Resideo's significant impact in the home safety and controls market.
- Live Streaming and Replay: All fireside chats will be webcast live on Resideo's Investor Relations page and available for replay for 30 days, ensuring investors stay informed about the company's latest developments and strategic direction.
See More
Resideo Technologies Shares Plunge 15.5% on Q2 Guidance Miss
- Guidance Downgrade: Resideo Technologies' shares fell 15.5% after the company provided second-quarter guidance of $1.916 billion to $1.94 billion in net revenue, which was below Wall Street's expectation of $1.978 billion, despite beating first-quarter estimates.
- Margin Pressure: The gross margin has decreased to 27.76% due to rising freight and fuel costs, which is not surprising given the soaring oil prices caused by the closure of the Strait of Hormuz, leading to significant market concerns regarding the softening high-end residential audio-visual market.
- Price Increase Strategy: Management intends to raise prices to offset these cost increases while maintaining full-year revenue guidance of $7.8 billion to $7.9 billion; however, the market reacted negatively to the lowered adjusted EPS expectations from $0.84 to a range of $0.71 to $0.75.
- Uncertain Market Outlook: Although management believes that price increases will mitigate cost pressures, the weakness in the high-end residential market remains a concern, and a quick resolution to the ongoing conflict, along with successful price adjustments, could potentially restore investor confidence in the stock.
See More
Semiconductor Stocks Rally, Alibaba Cloud Revenue Soars
- Semiconductor Stocks Rally: Shares of Micron Technology rose about 3% as investors bought back into the semiconductor sector, with the VanEck Semiconductor ETF (SMH) increasing over 1%, indicating a resurgence of confidence in the industry.
- Akamai Stock Surge: Akamai Technologies saw its shares jump nearly 7% after Bank of America upgraded its rating to buy and raised its price target from $130 to $175, reflecting a strategic shift towards becoming a credible AI infrastructure platform.
- Nebius Revenue Surge: Nebius reported $399 million in revenue for Q1, marking a staggering 684% increase year-over-year, and announced securing up to 1.2 gigawatts of power and land for a new AI factory in Pennsylvania, driven by rising demand for cloud and GPU capacity.
- Alibaba Cloud Performance: Alibaba's U.S.-listed shares rose 6% following a 38% year-over-year revenue increase in its cloud computing unit for Q1, alongside significant investments in artificial intelligence, reinforcing its competitive position in the market.
See More
EchoStar Gains FCC Approval, Shares Rise
- EchoStar Stock Surge: EchoStar's shares rose nearly 4.5% following the FCC's approval of its $40 billion sale of wireless spectrum to AT&T and SpaceX, which is expected to significantly enhance the company's financial position and market competitiveness.
- Alibaba Profit Plunge: Alibaba's U.S.-listed shares fell 3% after reporting an 84% drop in Q1 profit, indicating severe short-term profitability challenges despite heavy investments in AI, which may hinder its future market performance.
- Nextpower Revenue Guidance Upgraded: Nextpower raised its full-year revenue guidance to a range of $3.8 billion to $4.1 billion, up from $3.6 billion to $3.8 billion, resulting in a 14% stock surge that reflects the company's strong growth potential in the energy sector.
- Resideo Earnings Guidance Miss: Resideo's shares plunged nearly 9% after guiding for current-quarter adjusted earnings between 71 to 75 cents per share, below the analyst expectation of 84 cents, despite beating first-quarter estimates, indicating potential investor concerns about future performance.
See More
Resideo Q1 2026 Earnings Exceed Expectations
- Significant Revenue Growth: Resideo's total net revenue for Q1 increased by 8% year-over-year to over $1.9 billion, exceeding the high end of the company's outlook range, indicating strong market demand and effective cost management.
- Adjusted EBITDA Increase: Adjusted EBITDA grew by 28% year-over-year to $215 million, reflecting the company's success in enhancing operational efficiency and controlling costs, which boosts confidence in future profitability.
- Separation Progress: The company has completed the public filing of ADI's Form 10, with the spinoff expected to be finalized between mid-Q3 and mid-Q4, marking a key milestone in the company's strategic restructuring and enhancing investor confidence in future growth.
- Optimistic Outlook: CFO Carlet reaffirmed the 2026 performance outlook, projecting Q2 net revenue to be in the range of $1.916 billion to $1.940 billion, and while facing rising cost challenges, the company plans to implement price adjustments in Q2 to mitigate inflationary pressures.
See More
Resideo Technologies Reports Strong Q1 2026 Financial Results Exceeding Expectations
- Significant Revenue Growth: Resideo achieved net revenue of $1.912 billion in Q1 2026, an 8% year-over-year increase, with the Products & Solutions segment generating $706 million, reflecting strong performance in a dynamic macroeconomic environment.
- Adjusted EBITDA Improvement: The first quarter adjusted EBITDA reached $215 million, a 28% increase year-over-year, indicating successful operational efficiency and cost control, which bolsters confidence in future growth.
- Cash Flow Management: Despite an increase in cash used by operating activities to $145 million, the company maintained $438 million in cash and cash equivalents, demonstrating effective liquidity management.
- Optimistic Outlook: Resideo reaffirms its full-year 2026 outlook, projecting second-quarter net revenue between $1.916 billion and $1.940 billion, indicating confidence in future market demand and sustained growth potential.
See More
