Imperial Capital, a Los Angeles, California-based investment banking firm, recently released an equity report for Resideo Technologies, assigning an outperform rating and a one-year price target of $24 on Resideo’s shares.
Earlier this month, on Mar. 7th 2019, Resideo reported Q4 earnings, Resideo’s first full quarter since the Honeywell spinoff. The results as expected were outstanding, but as the company lowered its 2019 forecast (down to just 4% growth), based on potential economy softening, the stock markets responded pretty harshly. The company’s stock price took a deep 25% nosedive on the day to hover around $18 per share. (On Friday, Mar. 15th 2019, Resideo’s stock was trading above $20).
Resideo, headquartered in Golden Valley, Minnesota, is the sole operator of the Honeywell Homes products brand -ADI Global Distribution. Moreover, the Minnesota-based company has a strong presence – 4.7 million connected customers & 2.3 million security panel signals transmitted daily, as per the equity report – in the connected premises software solutions market.
And this coming fiscal year 2019, Resideo plans to invest $90 million towards new product and software launches, along with further scaling its smart home and security platform. Furthermore, the Imperial Capital report also claims that the Resideo management, with eyes set on improving the margins, expects to eliminate $50 million in overhead costs by the end of the year.
The Imperial Capital’s equity report states, “We would be more enthusiastic if management were to focus on acquiring technologies that improve analytics of its current product offerings, provide the end-user with additional services, and introduce initiatives to improve its recurring revenue business”.