Value
9.0/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.9 |
| EV/EBITDA | 6.0 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
- ▸Forward P/E: 10.2x
- ▸PEG: 0.05
- ▸Attractively valued
REZI · Why this verdict
Why Resideo Technologies (REZI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Resideo Technologies offers deep valuation with a forward P/E of 10.1x and a PEG ratio of 0.05, and analysts see 55% upside to consensus targets, but below-average business quality and a recent C-suite change add execution risk to any recovery thesis.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business quality score of 3.1 is below the minimum acceptable floor of 4.0, driven by low return on equity and thin gross margins, which limits the risk-adjusted attractiveness of the thesis despite the valuation discount. Quality breakdown | Quality score improves to above 4.0 within 4 quarters as operating leverage from revenue growth flows through to margins. | →Stable |
| CounterIndustrial distribution businesses structurally face thin margins and limited moat, and the current quality score trajectory may reflect permanent rather than temporary impairment. | ||
Analysts assign a consensus price target approximately 55% above the current price of $31.62, and the forward P/E of 10.1x with a PEG of 0.05 suggests the company is priced at a significant discount relative to its earnings growth trajectory. Sentiment breakdown | The stock closes at least 20% of the gap to analyst consensus targets over the next 12 months as earnings growth is recognized. | →Stable |
| CounterAnalyst targets can remain aspirational for long periods when a company's underlying business quality is below minimum thresholds, and the quality score of 3.1 represents exactly that situation. | ||
Resideo has beaten earnings expectations in 3 of the last 4 quarters, with an extraordinary 105% beat in one quarter and an average positive surprise of 37% across the four quarters. Earnings | The company beats estimates in at least 2 of the next 4 quarters and average surprise remains above 10%. | →Stable |
| CounterThe one miss in the prior four quarters was a -4.5% surprise, and C-suite changes flagged in the governance data can disrupt operational execution and guidance accuracy. | ||
The price target framework shows 31.7% potential upside against a 15% downside scenario, producing a reward-to-risk ratio of 4.5x, which represents a favorable asymmetric setup if business execution improves. Targets | The stock rises above $41 within 18 months, reaching at least 75% of the stated analyst consensus target. | →Stable |
| CounterThe current technical setup shows volume distribution with falling on-balance volume, and the 200-day moving average slope is positive only at 1.6%/month, suggesting the pullback in uptrend may extend further. | ||
The business quality score of 3.1 is below the minimum acceptable floor of 4.0, driven by low return on equity and thin gross margins, which limits the risk-adjusted attractiveness of the thesis despite the valuation discount.
→StableQuality breakdown
- Expectation
- Quality score improves to above 4.0 within 4 quarters as operating leverage from revenue growth flows through to margins.
CounterIndustrial distribution businesses structurally face thin margins and limited moat, and the current quality score trajectory may reflect permanent rather than temporary impairment.
Analysts assign a consensus price target approximately 55% above the current price of $31.62, and the forward P/E of 10.1x with a PEG of 0.05 suggests the company is priced at a significant discount relative to its earnings growth trajectory.
→StableSentiment breakdown
- Expectation
- The stock closes at least 20% of the gap to analyst consensus targets over the next 12 months as earnings growth is recognized.
CounterAnalyst targets can remain aspirational for long periods when a company's underlying business quality is below minimum thresholds, and the quality score of 3.1 represents exactly that situation.
Resideo has beaten earnings expectations in 3 of the last 4 quarters, with an extraordinary 105% beat in one quarter and an average positive surprise of 37% across the four quarters.
→StableEarnings
- Expectation
- The company beats estimates in at least 2 of the next 4 quarters and average surprise remains above 10%.
CounterThe one miss in the prior four quarters was a -4.5% surprise, and C-suite changes flagged in the governance data can disrupt operational execution and guidance accuracy.
The price target framework shows 31.7% potential upside against a 15% downside scenario, producing a reward-to-risk ratio of 4.5x, which represents a favorable asymmetric setup if business execution improves.
→StableTargets
- Expectation
- The stock rises above $41 within 18 months, reaching at least 75% of the stated analyst consensus target.
CounterThe current technical setup shows volume distribution with falling on-balance volume, and the 200-day moving average slope is positive only at 1.6%/month, suggesting the pullback in uptrend may extend further.
Per-dimension breakdown
Quality
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.4 |
| Gross margin | 1.9 |
| Op margin | 3.2 |
| Net margin | 0.0 |
| Current ratio | 7.2 |
| Moat | 3.6 |
| Piotroski F | 5.6 |
- ▸No competitive moat
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 10.0 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.5 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.6 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 51%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.4 |
| quality rank | 0.6 |
| growth rank | 5.0 |
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.5 |
| support resistance | 2.0 |
| 52w position | 4.3 |
| gap | 5.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.6 |
| days to cover | 7.9 |
| volatility | 0.8 |
| put call | 10.0 |
| implied vol | 0.5 |
| max pain risk | 3.0 |
| beta | 4.5 |
| debt equity | 4.6 |
- ▸High IV: 77%
- ▸Above max pain $25
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- ASYMMETRY:3.0>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.02
Upside
+28.3%
Downside
9.4%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 59
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.65>1.3, MCap $4.8B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 9.0 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:4.0<4.5.
The strongest dimensions are Value at 9.0, Growth at 7.2, and Catalyst at 6.7; the weakest are Technical at 3.0, Quality at 3.1, and Momentum at 4.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 3.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analysts assign a consensus price target approximately 55% above the current price of $31.62, and the forward P/E of 10.1x with a PEG of 0.05 suggests the company is priced at a significant discount relative to its earnings growth trajectory.
Trip ifAnalyst consensus price target declines below $35 or the stock drops below $25.
- P2Resideo has beaten earnings expectations in 3 of the last 4 quarters, with an extraordinary 105% beat in one quarter and an average positive surprise of 37% across the four quarters.
Trip ifEarnings surprise falls below -10% in at least 2 of the next 4 quarters.
- P3The price target framework shows 31.7% potential upside against a 15% downside scenario, producing a reward-to-risk ratio of 4.5x, which represents a favorable asymmetric setup if business execution improves.
Trip ifStock fails to rise above $38 within 18 months from today's price of $31.62.
- P4The business quality score of 3.1 is below the minimum acceptable floor of 4.0, driven by low return on equity and thin gross margins, which limits the risk-adjusted attractiveness of the thesis despite the valuation discount.
Trip ifQuality score remains below 4.0 for more than 4 consecutive quarters.