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    Investors Still Aren't Entirely Convinced By Resideo Technologies, Inc.'s (NYSE:REZI) Revenues Despite 29% Price Jump

    Simply Wall St·07/31/2025 11:31:35
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    Resideo Technologies, Inc. (NYSE:REZI) shares have continued their recent momentum with a 29% gain in the last month alone. The last 30 days bring the annual gain to a very sharp 26%.

    Although its price has surged higher, Resideo Technologies may still be sending buy signals at present with its price-to-sales (or "P/S") ratio of 0.6x, considering almost half of all companies in the Building industry in the United States have P/S ratios greater than 1.5x and even P/S higher than 4x aren't out of the ordinary. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.

    We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

    View our latest analysis for Resideo Technologies

    ps-multiple-vs-industry
    NYSE:REZI Price to Sales Ratio vs Industry July 31st 2025

    How Has Resideo Technologies Performed Recently?

    With revenue growth that's superior to most other companies of late, Resideo Technologies has been doing relatively well. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the share price, and thus the P/S ratio. If the company manages to stay the course, then investors should be rewarded with a share price that matches its revenue figures.

    If you'd like to see what analysts are forecasting going forward, you should check out our free report on Resideo Technologies.

    What Are Revenue Growth Metrics Telling Us About The Low P/S?

    In order to justify its P/S ratio, Resideo Technologies would need to produce sluggish growth that's trailing the industry.

    If we review the last year of revenue growth, the company posted a worthy increase of 14%. The latest three year period has also seen a 19% overall rise in revenue, aided somewhat by its short-term performance. Therefore, it's fair to say the revenue growth recently has been respectable for the company.

    Turning to the outlook, the next year should generate growth of 5.5% as estimated by the dual analysts watching the company. That's shaping up to be similar to the 5.4% growth forecast for the broader industry.

    With this information, we find it odd that Resideo Technologies is trading at a P/S lower than the industry. Apparently some shareholders are doubtful of the forecasts and have been accepting lower selling prices.

    What Does Resideo Technologies' P/S Mean For Investors?

    The latest share price surge wasn't enough to lift Resideo Technologies' P/S close to the industry median. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

    We've seen that Resideo Technologies currently trades on a lower than expected P/S since its forecast growth is in line with the wider industry. When we see middle-of-the-road revenue growth like this, we assume it must be the potential risks that are what is placing pressure on the P/S ratio. It appears some are indeed anticipating revenue instability, because these conditions should normally provide more support to the share price.

    Before you take the next step, you should know about the 3 warning signs for Resideo Technologies (1 is a bit concerning!) that we have uncovered.

    If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).