What Happened?
Shares of home automation and security solutions provider Resideo Technologies (NYSE:REZI) fell 23.6% in the morning session after the company reported mixed third-quarter 2025 financial results, with an earnings beat overshadowed by a revenue miss and a weak outlook.
Resideo surpassed adjusted earnings per share (EPS) expectations, reporting $0.89 against a forecast of $0.69. However, the company's revenue of $1.86 billion came in slightly below the expected $1.87 billion. Adding to investor concerns, Resideo provided a weak forecast. The company guided for fourth-quarter revenue of $1.87 billion, falling short of analysts' $1.92 billion estimates. Furthermore, management lowered its full-year adjusted EPS guidance by 6.8% to $2.62 at the midpoint. The sharp decline in the stock price suggested that investors focused more on the revenue shortfall and downbeat guidance than the positive earnings surprise.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Resideo? Access our full analysis report here.
What Is The Market Telling Us
Resideo’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Resideo and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 30 days ago when the stock dropped 3.2% after investors grew anxious as the U.S. government shutdown extended into its seventh day, creating widespread uncertainty.
The political stalemate in Washington has tangible consequences for the economy and markets. A key impact is the delay in the release of crucial economic data, including the September jobs report, leaving the Federal Reserve with less information to guide its policy decisions. The shutdown is also causing direct disruptions, with staffing shortages at the Federal Aviation Administration (FAA) leading to widespread delays at major airports. This combination of economic ambiguity and real-world service interruptions has dampened investor confidence across multiple sectors.
Adding to the unease, Chief Economist at Moody's Analytics, Mark Zandi, warned that 22 states are already showing clear signs of a recession, placing the broader U.S. economy in a precarious position. Also, the latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations are rising, while their outlook on the labor market is deteriorating. Consumers expressed greater concern about potential job losses and expect lower earnings growth, factors that directly impact discretionary spending.
Resideo is up 37.8% since the beginning of the year, but at $31.39 per share, it is still trading 29.5% below its 52-week high of $44.50 from October 2025. Investors who bought $1,000 worth of Resideo’s shares 5 years ago would now be looking at an investment worth $1,692.
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