Resideo Cuts Costs, Weak Outlook 2023 Analyzed
Resideo's challenges have worsened. 3 months after weak results triggered a 30% stock price drop, now Resideo says it will cut its global workforce by 5% while offering weaker guidance for 2023.
In this note, we examine the issues impacting Resideo including:
- Cutting costs/employees
- Products vs ADI business issues
- ADI Performance
- ADI White Labelling
- Inventory Reduction
- Computer Vision Acquisition
- 2023 Outlook
- Stock Status
Cutting ***** / *********
******* **** ** ******* ** ******** 5% ** *** ****** ********* ** "respond ** *** ******** ****** **********," especially ********** ** *********** *** *******. They **** **** **** **** ****** to ****** ***** *** ******* **** "near-term ************* *** ****-**** *******."
Products ** *** ******** ******
******* ******** ** * ******** *****, with *** ***** ******** *********** **** its ******** *** ********* ********. ** the *******'* $*.* ******* ** **** revenue, **% ** **** **** **** ADI. *** ******** & ********* ******** grew ******* ** **% ** ****, but **** *** ********* *** ** acquiring ***** ***** ***** ********* *** more **** **% ** *** ****'* revenue.
*** ****, *** *** ****** ****** prospects **** ******** & ********* ***** the ******* *********** *** ************* ******, in ********** **** *** ********* *********** customer ****, **** *** ******* ******** including:
******** ********** ****** *** *********** *** markets ******** ** **** **********...
********* ****** *** *********** *** ************ and ********** ********
ADI ***********
*** ******* ******* *** *** ******** unit ********* ********** ****** ** ********* sales *** *-********:
*** ******* ***** ********* ***** ** 37% *** **** *** ******* *** 20% ** ***** ***** ********* *** e-commerce ******* ** *** ****** *******.
********, ***** *** ************ *** **** security-focused, *** ******* **** **** *** now ***** * **** ******* ******* in ** *** **** **************:
*** ********* ** ******* *** ******** to ****** **** ******** ** *** Datacom *******. ***** ********** ********* *** over $*** ******* ** ******* ** 2022, ** **% ****-****-****.
ADI ******* ***** *********
*** ** ******* *** ********* ******* products ** ** *** **** ** its ******* ********:
********* ****** ******* **** **% ** 2022 *** ******* * *********** ****-**** revenue *** ****** *********** ***********. ** launched **** *** *** **** *** three *** ****** ** ****. ******* Advance, ***** ******** ****-********* ***** ** wire *** ** *** ******* ********* and *** *** *** **** ****** control *** ***********. ** **** ******** to ***** **** ***** ********* ** 2023 *** *** ********** ******* ********* opportunities *** *** **** *** ***** initiatives.
** ********** ****** "*** ***" ****.
*** **** ******** **** **** ****** harms *** ********:
*** ********* ******' ***** ** -- that ****** ************ ** *********** *** the ****** ********** ** **** ******** has **** ***********, *** ** **'** talked *****, ** *** **** ******* on ***** * ***** ******* **** our *****-***** ********* *** **'** *** going ** **** ****, *** ** have ***** **** ***** ** ** ability ** **** **** ********* ******' business ** **** **** **don't **** *** *****-***** ************* ** ***, *** ** **** *****, **** *** **** **** **. [emphasis added]
ADI ********* **** *********
**** ** *** ****** ****** ** ADI *** ****** ** *********:
*** ********* **** **** **** **** inflationary ****** ** ***** ********. **** was ***** **** ** ***** ****** expansion *** *** ****.
Customer ********* *********
******* **** *** ******* *** ******** by ************ *** *** ********* "********** to ****** ********* ******," *** **** expect *** ********* ** *******:
** ******* *** *** *** ************ customers **** **** *********** ******** ** rightsizing ***** ***********. ** ****** ** will **** *** *** ***** ** terms ** ********** ******* *** ** expect ** ***** **** **** **** as **** **********.
*** ******* ** ********* ****** ****** reflects ********* ***** **** ******* ***** the ******** ** ***** ** ****, especially ** *** *********** ******.
***********
******* ****************** ***-*******. **** ****:
** ******** ********, ****** * *** Zealand-based **** ** ********* **** *********** capabilities ** *******, ******, *** **-******* video *********.
*** **** ****** * ***** ****** of *********** ** *******, ******, *** processors ***** **** **** ************* **** silicon *** ******** ****** ************ ********. These ************ **** **** ******* *** security ***** ******** *** **** ********** our ***** ** ********* ********** ************ for *** *****.
********'* ***************** ** *****:
***** *** ******* *** ******* *** other *******, ** ****** **** ** for ***** ******** & ********* ******** that ***** ******** ****** **** *** which ********* ******* *** ******** ****.
2023 *******
*******, ******* ******* ******* ** ** flat ** **** ******** ** ****'* $6.4 *******:
******* ** *** ******* *** *** full-year ****, ** ****** ******* ** be ** *** ***** ** $*.* billion ** $*.** *******,implying **** ******* ** *** ********.
*******, *** ******* **** ****** ** grow *******:
************ ***** ****** ** ******** ** be ** *** ***** ** **.*% to **.*% *** ********* ****** ** expected ** ** ** *** ***** of $*** ******* ** $*** *******, an ******** ** *% ** *** midpoint.
******* **** **** ****** ***-******-***** ****** declines ** *** ******** *** ********* business ** ****, **** ****** ***** price **** ** *** **** **** will ******** *** ****. **** **** expect ***** ******* ** **** ******* to ** ******** ** ***** ******* and * ******* ******** **** **** inflation. **** ****** ***** **** ********* effort ** ****** ****** *** *******.
*** ******* *** * **** ********** view ****** *** *** *******. **** said:
*** ***, *** **** ******* ************ low-single-digit ******* ****** ** ********* ** commercially ******* ********** ** ********* ****** by ********* ****** ******** ** *********** categories, ********* ** *** *********
Stock **
*** *******'* ***** ** ** *% today, ********** **** ********* ******* ******** that ******* ***** **** **** **** worse:
*** *******'* ***** ******* **** ~**% over *** **** * ****:
********* ************* **** *** ******* ************ on ******* **, ****. ***** ****, Resideo ****** **** ****** ** **** than **%. **** *** ************ ** a **** **** *******, **** **** could ** ***** ***********.
************ **** *** ***** *** ***** the “*** **** ** *** ****** for **** ****** ******” ***** ******* more ********* (********* ****) ** ****** dissatisfaction (******** ****) **** ********* ** “free ********” ***** ********* ******** ***** but ******* ****** ******* ***** *** high ****** *****.
**** ******* ** **** **** ****** nicely ** **** ******** ***********, *******, inventory ** **** ** ******** ***** “happy *******”. ****