Resideo (REZI) Surpasses Revenue Expectations in Q4, Raises Outlook

Key Financial Results Q4 2024 (CY):

* Revenue: $1.86 billion, exceeding estimates of $1.84 billion (20.9% YoY growth)
* Adjusted EPS: $0.59, outperforming consensus estimates of $0.56 (6.3% beat)
* Adjusted EBITDA: $187 million, in line with estimates of $187.5 million (10.1% margin)

Outlook for Fiscal Year 2025:

* Revenue guidance: $7.39 billion at midpoint, surpassing analyst estimates by 0.6% (9.2% growth vs. 8.4% in FY2024)
* EBITDA guidance: $765 million at midpoint, slightly below estimates of $774.3 million

Operational Highlights:

* Organic net revenue growth in both Products and Solutions and ADI segments
* Gross margin expansion
* Record operating cash generation

Analyst Commentary:

"Resideo's execution drove excellent operational results and financial performance in Q4. The company's innovation and focus on customer satisfaction position it well for continued growth in the future," said Jay Geldmacher, Resideo's President and CEO.

Key Performance Indicators:

* Sales growth: 6.3% compounded annual growth rate over the past five years
* Operating margin: 8.4% average over the past five years, improving by 1.6 percentage points
* EPS growth: 21.2% compounded annual growth rate over the past five years

Valuation and Investment Considerations:

* Market capitalization: $3.21 billion
* Trading at a price-to-sales (P/S) ratio of 1.72, slightly below the sector average
* Analysts expect 8.9% revenue growth over the next 12 months
* Full-year EPS estimate of $2.26, representing 6.9% growth

Conclusion:

Resideo's solid Q4 performance and positive outlook support its investment prospects. While the stock may have experienced a minor pullback after earnings, its long-term growth potential and operational execution remain attractive.