What happened?
Shares of home automation and security solutions provider Resideo Technologies (NYSE:REZI) fell 23.6% in mid-morning trading after the company reported mixed financial results for the third quarter of 2025, with a profit decline overshadowed by revenue declines and a weak outlook.
Resideo beat expectations for adjusted earnings per share (EPS), reporting $0.89 versus a forecast of $0.69. However, the company's revenue of $1.86 billion was slightly below the expected $1.87 billion. To add to investor concerns, Resideo issued weak guidance. The company forecast fourth-quarter revenue of $1.87 billion, falling short of analysts' estimates of $1.92 billion. Additionally, management lowered its full-year adjusted EPS forecast by 6.8% to $2.62 at midyear. The sharp decline in the stock price suggested that investors were more focused on the revenue decline and optimistic forecast than the positive earnings surprise.
The stock market overreacts to news, and large drops can provide good opportunities to buy high-quality stocks. Is now the time to buy Resideo? You can find our full analysis report here.
What does the market tell us?
Resideo shares are quite volatile, with 15 moves of more than 5% in the last year. But even for Resideo, such big moves are rare and suggest that this news has had a significant impact on the market's perception of the company.
The last big move we wrote about came 30 days ago, when the stock fell 3.2% after investors became concerned as the U.S. government shutdown entered its seventh day, creating widespread uncertainty.
The political standstill in Washington is having noticeable consequences for the economy and markets. A key impact is the delay in the release of key economic data, including the September jobs report, leaving the Federal Reserve with less information to make policy decisions. The shutdown is also causing direct disruption, with staffing shortages at the Federal Aviation Administration (FAA) causing widespread delays at major airports. This combination of economic uncertainty and real-world service disruptions has dampened investor confidence across multiple sectors.
Adding to the concern, Mark Zandi, chief economist at Moody's Analytics, warned that 22 states were already showing clear signs of recession, putting the entire U.S. economy in a precarious position. Additionally, the New York Fed's latest survey of consumer expectations found that households' short-term inflation expectations are rising as their labor market outlook worsens. Consumers expressed greater concern about possible job losses and expected lower profit growth, factors that directly impact discretionary spending.
Resideo is up 37.8% year-to-date but is trading at $31.39 per share, still 29.5% below its 52-week high of $44.50 set in October 2025. Investors who bought $1,000 worth of Resideo shares five years ago would now be considering a $1,692 investment.
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