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Resideo Technologies, Inc. (REZI) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Resideo Technologies, Inc. (REZI)

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Intrinsic Value (DCF)

Current$38.00
→
Intrinsic$52.32
+38%
$32.82$52.32$89.35
Market implies 10% growth for 5 years
DCF analysis suggests REZI could have 38% upside at 16% growth — verify assumptions match your view.
At $38, the market prices in 10% annual cash flow growth — a moderate expectation aligned with historical trends (16%).
Range: Bear $33 → Bull $89. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →12%14%16%18%
8%$65$71$78$86
10%$43$48$52$57
12%$31$34$38$42
14%$24$26$29$32

Bull Case

  • Bull case ($89) offers 135% upside at 19% growth, 9% discount
  • 27% margin of safety vs. base case estimate
  • Market-implied growth (10%) ≤ historical CAGR (16%)

Bear Case

  • Bear case ($33) implies 14% downside at 13% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$422.36M
Year 2$490.09M
Year 3$568.67M
Year 4$659.85M
Year 5$765.66M
Terminal$11.27B

📐 Model Inputs

Growth Rate16.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$364.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is REZI stock undervalued or overvalued?
🟢 UNDERVALUED

REZI trades at $38.00 vs. our DCF-derived intrinsic value of $52.32, implying +47% upside. At a 10.0% WACC and 16.0% projected FCF growth, the market appears to be underpricing the present value of REZI's future cash flows. The bear case ($32.49) still suggests upside, providing margin of safety.

What is REZI's intrinsic value?

Using a 5-year DCF model: Base FCF of $364M, projected at 16.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.34B net debt and dividing by 0.15B shares: Bear $32.49 | Base $52.32 | Bull $80.70. Current price $38.00 implies +47% to base case.

How is REZI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 16.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($9.14B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 25.1x.