In this article, we discuss 10 smart home technology stocks to buy today. If you want to skip our detailed analysis of these stocks, go directly to 5 Smart Home Technology Stocks To Buy Today.
As homeowners demand new-age designs, efficiency, and innovation in their houses, real estate companies and architects turn towards the smart home companies to offer technologies and amenities that promote convenience and automation. In 2020, the smart home market was valued at $79.13 billion, and the market is projected to grow to $313.95 billion by 2026 at a CAGR of 25.3% from 2021 to 2026.
The continuous increase in the number of people on the internet around the world will likely raise the overall demand and adoption of smart home technologies. The growth of the smart home market is facilitated by the declining prices of smart sensors, increasing adoption of the internet of things, rising consumer spending, and a higher demand for energy optimization.
Despite advancements in technology, consumers still face several issues when it comes to smart home solutions. Since seamlessly connected homes are yet to be achieved, the smart home sector will see explosive growth in the future, but primary players in the market have still managed to add tremendous value for customers.
The most notable smart home technology stocks include Resideo Technologies, Inc. (NYSE:REZI), Honeywell International Inc. (NASDAQ:HON), and Apple Inc. (NASDAQ:AAPL), among others discussed in detail below.
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Our Methodology
We selected smart home technology stocks which displayed growth potential, positive hedge fund sentiment, and were awarded mostly positive analyst ratings.
Data from 924 elite hedge funds monitored by Insider Monkey in the fourth quarter of 2021 was used to gauge the hedge fund sentiment around the holdings.
Smart Home Technology Stocks To Buy Today
10. Universal Electronics Inc. (NASDAQ:UEIC)
Number of Hedge Fund Holders: 7
Universal Electronics Inc. (NASDAQ:UEIC) is an Arizona-based smart home technology company that develops and markets IoT devices, smart thermostat, smart home virtual assistant, universal remote controls, and home sensors.
Riley analyst Jeff Van Sinderen lowered the price target on Universal Electronics Inc. (NASDAQ:UEIC) on February 18 to $53 from $62 but kept a Buy rating on the shares after the Q4 results. Although the company continued its migration into more software-intensive/licensed new generation products along with royalty revenue, its gross margin experienced inflationary and currency pressure, the analyst told investors in a bullish note. However, he believes Universal Electronics Inc. (NASDAQ:UEIC) remains an attractive value play.
In Q4 2021, 7 hedge funds reported owning stakes in Universal Electronics Inc. (NASDAQ:UEIC), collectively amounting to $8.4 million, as compared to 10 funds in the quarter earlier, holding stakes in Universal Electronics Inc. (NASDAQ:UEIC) worth $9.2 million. AQR Capital Management held the biggest stake in the company, with 66,674 shares valued at $2.7 million.
In addition to Resideo Technologies, Inc. (NYSE:REZI), Honeywell International Inc. (NASDAQ:HON), and Apple Inc. (NASDAQ:AAPL), Universal Electronics Inc. (NASDAQ:UEIC) is steadily gaining the attention of institutional investors.
Here is what Carillon Tower Advisers has to say about Universal Electronics Inc. (NASDAQ:UEIC) in its Q2 2021 investor letter:
“Universal Electronics designs and manufactures pre-programmed universal wireless remote controls for home video and audio entertainment equipment. The firm’s shares underperformed in the quarter, due largely in part to the impact that the global semiconductor shortage is expected to have on its operations in the near-term. The lingering effects of the pandemic are also proving to be a minor headwind, as in-home installations of the firm’s products that require a technician remain below pre-pandemic levels. Despite this, the company is seeing notable margin expansion as it continues to push into more sophisticated, software-intensive products that are expected to be a significant source of future growth.”
9. Vacasa, Inc. (NASDAQ:VCSA)
Number of Hedge Fund Holders: 17
Vacasa, Inc. (NASDAQ:VCSA) is an American vacation rental company that is leveraging smart home technology to its 35,000 homes to allow for a comfortable guest experience and to ensure that rental home guests are good neighbors. These smart automation upgrades include keyless entry and decibel monitoring.
JPMorgan analyst Doug Anmuth on February 16 initiated coverage of Vacasa, Inc. (NASDAQ:VCSA) with an Overweight rating and a $10 price target. Vacasa, Inc. (NASDAQ:VCSA) is the largest end-to-end vacation rental management platform placing primary emphasis on serving homeowners, Anmuth tells investors in a bullish note. He believes Vacasa, Inc. (NASDAQ:VCSA)’s “solid execution” across supply acquisition, local operations, and distribution leading up to and during the pandemic allowed it to benefit from strong demand for alternative accommodations during the recovery. The analyst thinks that Vacasa, Inc. (NASDAQ:VCSA) will remain a strategic partner to Airbnb, Booking Holdings, and Expedia Group.
According to the fourth quarter database of Insider Monkey, 17 hedge funds were bullish on Vacasa, Inc. (NASDAQ:VCSA), with collective stakes valued at over $765 million.
8. SmartRent, Inc. (NYSE:SMRT)
Number of Hedge Fund Holders: 17
SmartRent, Inc. (NYSE:SMRT) is a smart home automation company that markets software and hardware for the automation of home solutions, accommodating home owners and home builders with its products and services.
On January 11, SmartRent, Inc. (NYSE:SMRT) provided an operational update wherein, units deployed for Q4 and FY 2021 were approximately 51,000 and 167,000 respectively, increasing by 69% and 100% year-over-year.
Keefe Bruyette analyst Ryan Tomasello initiated coverage of SmartRent, Inc. (NYSE:SMRT) with an Outperform rating and a $13 price target on February 14. The expanding landscape of public real estate technology companies offers exposure to “various secular themes tethered to the digitization of real estate – the world’s largest asset class”, the analyst told investors in a research note. He favors companies with “defensible competitive moats”, where he has “strong conviction” in profitability and management execution.
SmartRent (NASDAQ:SMRT) acquired iQuue on January 4, an open-architecture smart apartment company with over 22,000 installed and committed units throughout the east coast. The acquisition is expected to add approximately $2 million in annual recurring revenue for SmartRent (NASDAQ:SMRT).
Among the hedge funds tracked by Insider Monkey, 17 funds were bullish on SmartRent (NASDAQ:SMRT) in Q4 2021, with combined stakes amounting to $115.7 million. This is compared to 15 funds holding stakes in SmartRent (NASDAQ:SMRT) worth $213.8 million in the prior quarter.
Here is what Baron Discovery Fund has to say about SmartRent, Inc. (NYSE:SMRT) in its Q4 2021 investor letter:
“Many of our portfolio companies have been impacted by the well publicized problems in the global supply chain. It is our belief that as we move through 2022, we will see many of these issues be resolved. As a result, we expect the companies that were negatively impacted to restore their normalized growth trajectories. Portfolio companies that will benefit include SmartRent, Inc., an enterprise smart home automation company that can accelerate revenue growth when it has greater access to electronic equipment that is currently in short supply.”
7. Synaptics Incorporated (NASDAQ:SYNA)
Number of Hedge Fund Holders: 23
Synaptics Incorporated (NASDAQ:SYNA) is a California-based company that designs human interface software for smart home devices and automotive. Fisher Asset Management held the biggest stake in Synaptics Incorporated (NASDAQ:SYNA), with more than 1 million shares worth $311.1 million.
Elite hedge funds were quite bullish on Synaptics Incorporated (NASDAQ:SYNA) in the fourth quarter of 2021. 23 funds reported owning stakes in the company in Q4 2021, worth $560.5 million, as compared to the same number of funds in the quarter earlier, holding stakes in Synaptics Incorporated (NASDAQ:SYNA) worth $493.4 million.
On February 3, Synaptics Incorporated (NASDAQ:SYNA) announced its Q4 results. The company posted earnings per share of $3.26, topping estimates by $0.14. Revenue over the period jumped 17.59% year-on-year to $420.50 million, exceeding consensus by $716,670. Synaptics Incorporated (NASDAQ:SYNA) shares jumped 8% after Q4 showed record gross margins.
Needham analyst Rajvindra Gill raised the price target on Synaptics Incorporated (NASDAQ:SYNA) on February 4 to $340 from $320 and kept a Buy rating on the shares. The analyst cites the company’s “significant” Q4 beat and guidance raise, also noting that Synaptics Incorporated (NASDAQ:SYNA) has the industry’s broadest and most diverse smart home accessories portfolio.
Synaptics Incorporated (NASDAQ:SYNA) is an attractive entry point into the smart home market, just like Resideo Technologies, Inc. (NYSE:REZI), Honeywell International Inc. (NASDAQ:HON) and Apple Inc. (NASDAQ:AAPL).
Here is what FPA Queens Road Small Cap Value Fund has to say about Synaptics Incorporated (NASDAQ:SYNA) in its Q3 2021 investor letter:
“Synaptics, a developer of human interface (HMI) hardware and software, is experiencing a strategic shift to a higher-margin business, primarily Internet of Things (IoT) products, and continued its recent trend of announcing higher operating margins and providing favorable financial guidance. During the quarter, the company announced it was purchasing former portfolio holding, DSP Group, a communications chip designer.Management is executing well on this strategic shift and delivering impressive financial results.”
6. Resideo Technologies, Inc. (NYSE:REZI)
Number of Hedge Fund Holders: 24
Resideo Technologies, Inc. (NYSE:REZI) is an American company that manufactures smart home and software solutions, including security systems, home automation, and fire detection products. On February 15, Resideo Technologies, Inc. (NYSE:REZI) reported a GAAP EPS of $0.45, outperforming estimates by $0.08.
Resideo Technologies (NYSE:REZI) agreed on February 7 to acquire First Alert, a provider of home safety products, from Newell Brands Inc. (NASDAQ:NWL) for $593 million in an all cash transaction. Similarly, Resideo Technologies (NYSE:REZI) purchased on February 15 the Chinese privately held company, Arrow Wire & Cable, a leading regional distributor of data communications, connectivity, and security products.
As of December 2021, 24 hedge funds were bullish on Resideo Technologies, Inc. (NYSE:REZI), with combined stakes valued at $560.6 million, as compared to 28 funds in the prior quarter, holding stakes in Resideo Technologies, Inc. (NYSE:REZI) worth $525.8 million. Praesidium Investment Management Company is the biggest shareholder of the company, with 6.8 million shares worth $177.5 million.
Here is what ClearBridge Investments has to say about Resideo Technologies, Inc. (NYSE:REZI) in its Q1 2021 investor letter:
“More recent additions Resideo Technologies, a distributor of comfort, safety and energy efficiency products for the home are benefiting from new management teams better at allocating capital, optimizing manufacturing and improving procurement. The company has a strong opportunity to improve returns, which should lead to improved earnings and multiples.”
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Disclosure: None. 10 Smart Home Technology Stocks To Buy Today is originally published on Insider Monkey.
