Here's Why Resideo Technologies Stock Crashed 15% Today
Key Points
The market is doubting the full-year guidance given management's expectations for the second quarter.
The company is raising prices in response to increasing costs.
- 10 stocks we like better than Resideo Technologies ›
Shares in residential and commercial sensing and controls company Resideo Technologies (NYSE: REZI) slumped by 15.5% by 11:30 a.m. today. The move comes due to the company's earnings report, and more pertinently, its second-quarter guidance and management's commentary on evolving market conditions.
Resideo Technologies disappoints the market
Despite beating market expectations for the first quarter and reaffirming its 2026 outlook, the market focused on the lower-than-anticipated second quarter guidance and the pressures on profit margins coming from rising freight and fuel costs, and CEO Jay Geldmacher noting that "the high-end residential audio visual market has been softening."
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The margin pressures from fuel and freight costs aren't surprising in an environment where the ongoing closure of the Strait of Hormuz has sent oil prices gushing higher and impacted shipping costs due to diversions caused by the inability to ship through the Strait.
Given that backdrop, the last thing investors want to hear about is a softening in one of its higher-ticket price end markets.
Management intends to raise prices to offset cost increases, and it maintained full-year guidance for total net revenue of $7.8 billion to $7.9 billion and adjusted earnings per share (EPS) of $3 to $3.20. Still, the market stressed the guidance for second-quarter net revenue of $1.916 billion to $1.94 billion and adjusted EPS of $0.71 to $0.75, compared to Wall Street consensus expectations of $1.978 billion and $0.84, according to S&P Global Market Intelligence.
Image source: Getty Images.
Where next for Resideo Technologies
Management believes the implementation of price increases will offset the cost increase. That remains to be seen, and the weakness in the high-end residential market is a watch item. Still, a swift resolution to the conflict and a successful price increase could put the stock back in favor.
Should you buy stock in Resideo Technologies right now?
Before you buy stock in Resideo Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Resideo Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,744!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,353,500!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 13, 2026.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
