Resideo Technologies Inc (REZI, Financial) has recently experienced a notable uptick in its stock price, with a 15.38% increase over the past three months, culminating in a current price of $20.89. This recent performance indicates a significant rebound, especially considering the stock's modest decrease of 0.35% over the past week. Currently, the GF Value of REZI stands at $21.82, suggesting that the stock is Fairly Valued. This is a shift from three months ago when it was considered Modestly Undervalued with a GF Value of $23.39.
Overview of Resideo Technologies
Resideo Technologies operates within the business services sector, focusing on manufacturing and developing technology-driven products for comfort, energy management, safety, and security. The company is divided into two main segments: Products and Solutions, which includes a variety of home and commercial products, and ADI Global Distribution, a leader in wholesale distribution of security and low-voltage products. The majority of Resideo's revenue is generated in the United States. 
Assessing Profitability
Resideo Technologies boasts a strong Profitability Rank of 7/10, indicating robust profitability within its industry. The company's Operating Margin is 9.44%, which is higher than 65.12% of its peers. Additionally, its Return on Equity (ROE) and Return on Assets (ROA) stand at 7.95% and 3.24% respectively, positioning Resideo above nearly half of the companies in the industry. The Return on Invested Capital (ROIC) is also impressive at 8.20%. Over the past decade, Resideo has maintained profitability for eight years, underscoring its financial stability. 
Growth Metrics
Resideo's Growth Rank is currently 5/10, reflecting moderate growth potential. The company has seen a 3-Year Revenue Growth Rate per Share of 1.70% and a 5-Year Rate of 1.40%, indicating steady, if not spectacular, revenue increases. Future revenue growth over the next 3 to 5 years is estimated at 1.31%. Notably, the 3-Year EPS Growth Rate is an impressive 76.00%, significantly higher than the majority of its peers. This suggests that while revenue growth is moderate, profitability improvements are robust. 
Key Shareholders
Resideo's stock is held by several notable investors. John Rogers (Trades, Portfolio) is the top holder with 12,672,096 shares, representing 8.67% of total shares. Following him is Richard Pzena (Trades, Portfolio), holding 4,525,158 shares, and Mario Gabelli (Trades, Portfolio) with 594,074 shares. These significant investments by well-respected investors could be seen as a vote of confidence in Resideo's market position and future prospects.
Competitive Landscape
Resideo Technologies competes with several firms in the business services sector. Brady Corp (BRC, Financial) with a market cap of $2.88 billion, CoreCivic Inc (CXW, Financial) valued at $1.71 billion, and The Brink's Co (BCO, Financial) with a market cap of $4.02 billion are among its closest competitors. These companies represent a diverse range of market caps and operational focuses within the industry, providing a broad context for comparing Resideo's performance and market position.
Conclusion
Resideo Technologies demonstrates solid profitability and moderate growth potential within the business services industry. The stock is currently fairly valued according to GF Value, with a stable outlook based on recent performance metrics and market comparisons. Investors may find Resideo an appealing option due to its robust profitability metrics, moderate growth outlook, and the confidence shown by major shareholders.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
