What Happened?
Shares of home automation and security solutions provider Resideo Technologies (NYSE: REZI) jumped 13.5% in the afternoon session after the company reported fourth-quarter revenue that topped Wall Street estimates and provided an upbeat financial outlook for 2026. Resideo's sales in the fourth quarter rose 2% year-on-year to $1.90 billion, edging past analysts' expectations. However, the company's adjusted earnings of $0.50 per share fell short of consensus estimates by 4.5%. Investors appeared to focus on the company's strong forecast. For the upcoming first quarter, Resideo guided for revenue of $1.88 billion at the midpoint, which was 4.6% higher than what analysts had anticipated. Furthermore, its full-year 2026 guidance was a highlight, with projections for adjusted earnings per share and EBITDA beating consensus estimates by 11% and 5% respectively. The optimistic outlook suggests management expects robust performance ahead, outweighing the mixed results of the past quarter.
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What Is The Market Telling Us
Resideo’s shares are very volatile and have had 20 moves greater than 5% over the last year. But moves this big are rare even for Resideo and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 23.6% on the news that the company reported mixed third-quarter 2025 financial results, with an earnings beat overshadowed by a revenue miss and a weak outlook. Resideo surpassed adjusted earnings per share (EPS) expectations, reporting $0.89 against a forecast of $0.69. However, the company's revenue of $1.86 billion came in slightly below the expected $1.87 billion. Adding to investor concerns, Resideo provided a weak forecast. The company guided for fourth-quarter revenue of $1.87 billion, falling short of analysts' $1.92 billion estimates. Furthermore, management lowered its full-year adjusted EPS guidance by 6.8% to $2.62 at the midpoint. The sharp decline in the stock price suggested that investors focused more on the revenue shortfall and downbeat guidance than the positive earnings surprise.
Resideo is up 15.4% since the beginning of the year, and at $40.58 per share, it is trading close to its 52-week high of $44.50 from October 2025. Investors who bought $1,000 worth of Resideo’s shares 5 years ago would now be looking at an investment worth $1,643.
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