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Resideo Technologies, Inc. (REZI) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Resideo Technologies (REZI - Free Report) ? Shares have been on the move with the stock up 26.5% over the past month. The stock hit a new 52-week high of $26.19 in the previous session. Resideo Technologies has gained 38.8% since the start of the year compared to the 17.7% move for the Zacks Industrial Products sector and the 43.6% return for the Zacks Security and Safety Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2024, Resideo Technologies reported EPS of $0.58 versus consensus estimate of $0.57.
For the current fiscal year, Resideo Technologies is expected to post earnings of $2.29 per share on $6.74 billion in revenues. This represents a 44.94% change in EPS on an 8% change in revenues. For the next fiscal year, the company is expected to earn $2.61 per share on $7.35 billion in revenues. This represents a year-over-year change of 13.76% and 9.03%, respectively.
Valuation Metrics
Resideo Technologies may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Resideo Technologies has a Value Score of A. The stock's Growth and Momentum Scores are D and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 11.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22X. On a trailing cash flow basis, the stock currently trades at 11.5X versus its peer group's average of 15.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Resideo Technologies currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Resideo Technologies fits the bill. Thus, it seems as though Resideo Technologies shares could still be poised for more gains ahead.
How Does REZI Stack Up to the Competition?
Shares of REZI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Alarm.com Holdings, Inc. (ALRM - Free Report) . ALRM has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Alarm.com Holdings, Inc. beat our consensus estimate by 26.53%, and for the current fiscal year, ALRM is expected to post earnings of $2.27 per share on revenue of $934.97 million.
Shares of Alarm.com Holdings, Inc. have gained 9.6% over the past month, and currently trade at a forward P/E of 26.92X and a P/CF of 24.38X.
The Security and Safety Services industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for REZI and ALRM, even beyond their own solid fundamental situation.
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Resideo Technologies, Inc. (REZI) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Resideo Technologies (REZI - Free Report) ? Shares have been on the move with the stock up 26.5% over the past month. The stock hit a new 52-week high of $26.19 in the previous session. Resideo Technologies has gained 38.8% since the start of the year compared to the 17.7% move for the Zacks Industrial Products sector and the 43.6% return for the Zacks Security and Safety Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2024, Resideo Technologies reported EPS of $0.58 versus consensus estimate of $0.57.
For the current fiscal year, Resideo Technologies is expected to post earnings of $2.29 per share on $6.74 billion in revenues. This represents a 44.94% change in EPS on an 8% change in revenues. For the next fiscal year, the company is expected to earn $2.61 per share on $7.35 billion in revenues. This represents a year-over-year change of 13.76% and 9.03%, respectively.
Valuation Metrics
Resideo Technologies may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Resideo Technologies has a Value Score of A. The stock's Growth and Momentum Scores are D and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 11.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22X. On a trailing cash flow basis, the stock currently trades at 11.5X versus its peer group's average of 15.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Resideo Technologies currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Resideo Technologies fits the bill. Thus, it seems as though Resideo Technologies shares could still be poised for more gains ahead.
How Does REZI Stack Up to the Competition?
Shares of REZI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Alarm.com Holdings, Inc. (ALRM - Free Report) . ALRM has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Alarm.com Holdings, Inc. beat our consensus estimate by 26.53%, and for the current fiscal year, ALRM is expected to post earnings of $2.27 per share on revenue of $934.97 million.
Shares of Alarm.com Holdings, Inc. have gained 9.6% over the past month, and currently trade at a forward P/E of 26.92X and a P/CF of 24.38X.
The Security and Safety Services industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for REZI and ALRM, even beyond their own solid fundamental situation.