Control & Automation

Resideo’s Security, Home-Automation IPO: Comparing REZI, CTRL, ALRM

After IPO, Honeywell spinoff Resideo (NYSE: REZI) joins Control4 and Alarm.com as the only pure-play, pro-centric security and smart-home stocks. We compare 12 publicly traded competitors.

Resideo’s Security, Home-Automation IPO: Comparing REZI, CTRL, ALRM
Honeywell spinoff Resideo (REZI) fell 7.29% on IPO day, but creates a critical mass of pure-play, pro-centric, publicly traded security and smart-home companies, joining Alarm.com (ALRM) and Control4 (CTRL) in the category.

Julie Jacobson · October 30, 2018

Alarm.com (ALRM) and Control4 (CTRL) used to be the only pure-play, pro-centric security and home-automation companies on the U.S. stock market. Now comes a third publicly traded competitor, Resideo (NYSE: REZI), the Honeywell spinoff that went public on Monday, Oct. 29.

A trio probably qualifies as a critical mass of companies dedicated to professionally installed and monitored smart-home and security systems. With the onslaught of DIY systems that were "so easy your grandmother could do it," the home-tech "channel" was supposedly dead when Control4 launched a successful IPO in 2013. 

Alarm.com, the SHaaS (smart home as a service) provider whose dealers charge $25 to $75 per month for monitored security and remote smart-home management, was a dinasour: "Everyone monitors their own systems for free," they all said when Alarm.com went public in 2015.

RELATED: How Much is Alarm.com Worth? Establishing IPO Valuation

Investors rewarded both companies then, and continue to do so today -- not without some dips along the way.

Resideo didn't fare quite as well as Control4 and Alarm.com on REZI's first day of trading Monday, but at least the home-technology industry will for the first time have a good gauge of market sentiment with a trio of like-minded public companies.

From an opening price of $28, REZI hit the market Monday at $27.85 and ended the IPO day at $25.83, down $2.03 or $7.29%, with some 30.4 million shares traded.

The stock fell further after hours to $25.05, on volume of 11.5 million.

REZI vs. CTRL vs. ALRM 

Was it just a bad day for the stock market in general? Technology stocks? Pure-play home automation stocks?

Not really. True, most major indicators were down on Monday, but not by 7.3% (to be sure, an unfair comparison for an IPO stock).

Control4 dropped 0.76% Monday. Alarm.com fell 1.78%.

Performance of all three stocks in aggregate will indicate Wall Street's sentiment towards professionally installed, integrated, monitored, and supported home-technology systems.
— Re: Control4 (CTRL), Alarm.com (ALRM), Resideo (REZI)

Both competitors are very similar to Resideo, offering residential security and home-automation products and services primarily to professional installers, and in some cases the DIY sector.

RELATEDControl4 Up 25% on First Day of IPO; How Did They Get There?

All three companies -- now that Resideo has split from the diversified Honeywell -- are mainly focused on the residential/consumer sector, with little focus on, or penetration in, the commercial/industrial sectors.

Performance of all three stocks in aggregate will indicate Wall Street's sentiment towards professionally installed, integrated, monitored, and supported home-technology systems.

As such, we will refer to these three public companies going forward as the CEPro Home-Tech CORE in our stock-market tracking. 25-year-old CE Pro, an Emerald Expositions company, is the leading media company for home-technology professionals, including system designers, installers, specifiers and service providers.

The other stocks tracked by CE Pro touch on many elements of the CORE group, but diverge in various ways: Their residential security and home-automation business might be overshadowed by commercial/industrial interests (as with Honeywell, REZI's former parent); they may sell through the same market channels, but don't focus on security and home automation; or they may focus on security and home-automation, but largely bypass the professional installation market and sell direct to consumers.

Here's how Monday looked for smart-home and related U.S. stocks, as well as the stock market in general.


Comparing Public Security, Smart-Home, CE Companies


Closest REZI equivalents - security and smart home products and services, sold primarily through professional installers and service providers (CEPro Home-Tech CORE)

 

Resideo (Nasdaq: REZI) -7.3% Monday

REZI, CTRL, ALRM on DIY

HONEYWELL has spent the past several years upping its DIY security and smart-home game, and Resideo will continue the efforts, even using the Honeywell Home brand.

ALARM.COM has never seemed too interested in the Piper (bottom image) DIY business it inherited from Icontrol.

CONTROL4 swears it will never stray from its pro-channel roots - not as long as CEO Martin Plaehn is at the helm.

  • Channels - primarily high-volume security and smart-home dealers and installers, with some DIY, but always with an eye towards selling professional monitoring
  • Some light-commercial business as well
  • Hardware: security, home-automation and related hardware
  • Services: professional alarm monitoring services, cellular networks
  • Platform: Total Connect SHaaS (smart home as a service), integrating home automation and professionally monitored security systems - competitive with Alarm.com
  • Also includes ADI, the massive distributor of residential and commercial security, A/V, networking, controls, and all manner of low-voltage gear.
  • IPO 10/29/18 - Down 7.3% on IPO day

Alarm.com (Nasdaq: ALRM-1.78% Monday

  • Channels - almost exclusively high-volume security and smart-home dealers, with some (reluctant) DIY play since it inherited Icontrol's Piper unit
  • Starting to enter various commercial sectors
  • Platform: focus on SHaaS platform, competitive with Resideo
  • Hardware: growing security and smart-home hardware business
  • IPO 6/26/2015 - Up 5% on IPO day

Control4 (Nasdaq: CTRL) -0.76 Monday

  • Channels – mid-market to high-end home-technology integrators and specialty A/V shops, with zero direct-to-consumer sales
  • Hardware: mainstream and higher-end home-automation, audio, video, lighting controls, access controls, networking (Pakedge) and related gear
  • Platforms: Ihiji for remote network monitoring and diagnostics (primarily for service providers); 4Sight for remote smart-home access and configuration (end-user tool)
  • Does not sell traditional alarm systems, but integrates with third-party systems
  • IPO 8/5/2013 – Up 7.8% on IPO day

Strong REZI competitors in pro-centric security and home-automation, but contributions diluted by corporation’s other interests

  • ADT (NYSE: ADT) – Corp. focus on pro-oriented security (including cyber) and building controls, with strong business in residential security/smart-home installation, monitoring, and SHaaS via Alarm.com:  -1.62% Monday
  • Napco (Nasdaq: NSSC) – Corp. focus on pro-oriented security and building controls, with strong business in residential security and home automation hardware, along with iBridge SHaaS platform: +0.44% Monday
  • United Technologies Corp. (NYSE: UTX) - Interlogix brand is one of REZI's top competitors, with a strong portfolio of security and home automation offerings includings its own SHaaS; however, it’s just a blip in the UTX financials: -1.74% Monday
  • Johnson Controls (NYSE: JCI) – Building/industrial-controls giant picked up two strong REZI competitors, Qolsys and DSC, when it acquired Tyco in 2016, but like Interlogix the brands shrink under the conglomerate umbrella: -0.13% Monday

Related to REZI – smart-home solutions catering to DIY, but with a strong following among installation pros

  • Sonos (Nasdaq: SONO) – Whole-house music systems that integrate with home-automation systems, and are gathering built-in intelligence of their own; ostensibly sold through DIY channels, but also very popular among professional home-technology integrators. -0.41% Monday
  • Logitech (Nasdaq: LOGI) – Lots of DIY computer peripherals and some commercial-oriented solutions, including video collaboration. Strong smart-home portfolio including home-automation hubs and remote controls under the Harmony brand, often sold and installed by professional integrators. +0.023% Monday
  • Arlo Technologies (NYSE: ARLO) – Recently spun out of Netgear, and formerly “just a smart camera company,” Arlo is growing its smart-home portfolio, starting with a video doorbell and security light. +3.15% Monday

Other REZI-related

  • Ascent Capital Group (Nasdaq: ASCMA), owner of Brinks Home Security (formerly MONI and Monitronics) - Primarily a central monitoring station and dealer program for mass-market security and smart-home pros. DIY unit (formerly LiveWatch) provides third-party security and automation systems (Qolsys hardware, Alarm.com SHaaS) for self-installation and professional monitoring. -7.52% Monday
  • Universal Electronics Inc. (Nasdaq: UEIC) – OEM remote-control provider for most major A/V-device brands, with back-end services for device discovery, voice control and smart-home integration; building home-automation portfolio with acquisition of Ecolink (security devices) and RCS (smart thermostats and energy management). -2.10% Monday

Stock-Market Indices on REZI IPO Day

  • Dow Jones Industrial Average: -0.99%
  • S&P 500: -0.29%
  • Nasdaq 100 Technology Sector: -1.39%
  • Dow Jones US Consumer Electronics Index: -2.34%


7 Clever Ways to Hide Home Technology - CE Pro Download

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  About the Author

Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at jjacobson@ehpub.com

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  Article Topics


Control & Automation · Automation · Whole House Control · Security · Cameras · News · ADI · ADT · Alarm.com · Arlo · Brinks Home Security · Control4 · All Topics
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Comments

Posted by Randy Blanchard on October 30, 2018

The other piece of the puzzle that seems to be overlooked is that Resideo also picks up the Honeywell thermostat business.  This is an enormous business that gives them access to every home improvement and mass merchant in the world.

Posted by Mark Sipe on October 30, 2018

Julie,  not to worry, all of this was expected, the more the drop, the more the recovery.  Next year it will settle down with Resideo and Honeywell back up and using the lost from this year against profits.  They expected this as you said, in fact it serves them to have a dip before going back up.  ADI and the residential market aren’t shrinking, based on what we see from our analytics in Salez Toolz Honeywell products are having an increase in volume and overall sales to more dealers.  The market is usually lagging unless there is a panic and then they get out over their skis.  This is more of a separation than a divorce, the two halves will still be working together.  Some play checkers, some play chess, these guys are playing GO with lots of pieces on the board.

Posted by Julie Jacobson on October 30, 2018

Hey mark, as mentioned, there’s no shame in dropping 7-8% on IPO days as everyone jockeys around. It is a little troubling that they’re down an additional 17% today, though.

Posted by Mark Sipe on October 30, 2018

I think they knew this was going to happen and maybe even counted on it.  They take a loss now, next year the stock equalizes and goes back up to what it was or more, showing growth.  They take a loss for this year and reap rewards next year.  Both stocks will end up higher than before, these guys know what they’re doing, they have had experts crunching numbers I suspect for months.

Posted by Mark Sipe on October 30, 2018

I think they knew this was going to happen and maybe even counted on it.  They take a loss now, next year the stock equalizes and goes back up to what it was or more, showing growth.  They take a loss for this year and reap rewards next year.  Both stocks will end up higher than before, these guys know what they’re doing, they have had experts crunching numbers I suspect for months.

Posted by Julie Jacobson on October 30, 2018

Hey mark, as mentioned, there’s no shame in dropping 7-8% on IPO days as everyone jockeys around. It is a little troubling that they’re down an additional 17% today, though.

Posted by Mark Sipe on October 30, 2018

Julie,  not to worry, all of this was expected, the more the drop, the more the recovery.  Next year it will settle down with Resideo and Honeywell back up and using the lost from this year against profits.  They expected this as you said, in fact it serves them to have a dip before going back up.  ADI and the residential market aren’t shrinking, based on what we see from our analytics in Salez Toolz Honeywell products are having an increase in volume and overall sales to more dealers.  The market is usually lagging unless there is a panic and then they get out over their skis.  This is more of a separation than a divorce, the two halves will still be working together.  Some play checkers, some play chess, these guys are playing GO with lots of pieces on the board.

Posted by Randy Blanchard on October 30, 2018

The other piece of the puzzle that seems to be overlooked is that Resideo also picks up the Honeywell thermostat business.  This is an enormous business that gives them access to every home improvement and mass merchant in the world.

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