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Resideo Technologies (REZI) Soars 8%: Is Further Upside Left in the Stock?

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Resideo Technologies REZI shares soared 8% in the last trading session to close at $28.25. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6% gain over the past four weeks.

Resideo’s stock appreciated for the fourth straight day on the continued optimism surrounding the residential housing market. The company also posted impressive fourth-quarter 2020 results on Feb 25, wherein its revenues and earnings marked solid year-over-year improvements.

Furthermore, Resideo is witnessing strength in the U.S. housing market, supported by the anticipated new construction growth and product launches. During its last quarter earnings release, the company had stated that it foresees robust demand across the residential housing market in 2021, mainly driven by increased spending toward home investments and professional security solutions.

Price and Consensus

Price Consensus Chart for Resideo Technologies
Price Consensus Chart for Resideo Technologies

This residential comfort and security systems maker is expected to post quarterly earnings of $0.70 per share in its upcoming report, which represents a year-over-year change of +191.7%. Revenues are expected to be $1.34 billion, up 13.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Resideo Technologies, the consensus EPS estimate for the quarter has been revised 42% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on REZI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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