In this article, we discuss 10 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.”
5. Johnson Controls International plc (NYSE:JCI)
Number of Hedge Fund Holders: 42
Johnson Controls International plc (NYSE:JCI) is an Irish multinational conglomerate that offers climate control, facility management, and fire alarm and suppression for residential and commercial buildings.
On February 2, Johnson Controls International plc (NYSE:JCI) reported its Q4 financial results. The company posted earnings per share of $0.54, beating estimates by $0.01. The $5.86 billion revenue surpassed market consensus by $75.10 million.
Mizuho analyst Brett Linzey on February 3 set an $88 price target on Johnson Controls International plc (NYSE:JCI) and kept a Buy rating on the shares post the fiscal Q1 results. Johnson Controls International plc (NYSE:JCI) continues to make progress on the various commercial initiatives taking place across the organization, the analyst told investors in a research note.
In the fourth quarter of 2021, 42 hedge funds were long Johnson Controls International plc (NYSE:JCI), with combined stakes valued at $1.2 billion. Holocene Advisors held the largest stake in Johnson Controls International plc (NYSE:JCI) as of December 2021, with roughly 3.2 million shares worth $267.5 million.
Here is what Oakmark Global Fund has to say about Johnson Controls International plc (NYSE:JCI) in its Q4 2021 investor letter:
“Our U.S. final sale was Johnson Controls, a leading global supplier of fire detection and HVAC (heating, ventilation and air conditioning) systems. We originally purchased the shares believing that the new management team had the potential to improve profit margins meaningfully. Management has made progress on this goal, but part of this progress must be attributed to Covid-19. The pandemic inspired building owners to invest aggressively in new air handling and filtration systems, a Johnson Controls specialty. Management also executed a well-timed portfolio transaction, selling the company’s traditional car battery business for a good price before the trend favoring automotive electrification became dominant. The company’s stock has performed well over the past year, and we sold the Fund’s shares to reinvest in undervalued holdings.”
4. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 51
Honeywell International Inc. (NASDAQ:HON) is an American multinational conglomerate that has a dedicated unit to smart home technology, namely Home and Building Control, and provides heating, cooling, security, lighting, and smart appliances. Honeywell International Inc. (NASDAQ:HON) published its Q4 results on February 3, posting earnings per share of $2.09, exceeding estimates by $0.01.
UBS analyst Markus Mittermaier on February 15 lowered the price target on Honeywell International Inc. (NASDAQ:HON) to $220 from $237 after its Q4 earnings and below-consensus guidance but kept a Buy rating on the shares and anticipates potential upside from current levels.
On February 11, Honeywell International Inc. (NASDAQ:HON) declared a $0.98 per share quarterly dividend, in line with previous. The dividend is payable on March 11, to shareholders of record on February 25.
The company management announced on February 3 that despite a challenging supply chain situation, Honeywell International Inc. (NASDAQ:HON) has great projects that will generate returns for investors.
In Q4 2021, 51 hedge funds in the database of Insider Monkey were bullish on Honeywell International Inc. (NASDAQ:HON), up from 45 funds in the prior quarter. D E Shaw held the biggest position in Honeywell International Inc. (NASDAQ:HON), with 1.6 million shares worth $342.4 million.
Here is what ClearBridge Investments has to say about Honeywell International Inc. (NASDAQ:HON) in its Q1 2021 investor letter:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.”
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Apple Inc. (NASDAQ:AAPL)’s primary contribution to smart home technology is HomeKit, which enables users to control smart home appliances using Apple devices. Via a communication protocol, HomeKit allows for the integration and operation of multiple smart home accessories.
On January 27, Apple Inc. (NASDAQ:AAPL)’s Q4 results were published, with the company posting earnings per share of $2.10, beating estimates by $0.21. The $123.95 billion revenue also outperformed consensus estimates by $5.41 billion.
Apple Inc. (NASDAQ:AAPL) declared on January 27 a $0.22 per share quarterly dividend, in line with previous. The dividend was distributed on February 10, to shareholders of record on February 7.
Tigress Financial analyst Ivan Feinseth raised the price target on Apple Inc. (NASDAQ:AAPL) on February 15 to $210 from $198 and reiterated a Strong Buy rating on the shares following the company’s reported “record” Q1 results. The analyst believes further upside in the shares exists due to strong product demand, new product introductions, and accelerating services revenue, observing that his target represents a potential return of close to 25% from current levels.
Berkshire Hathaway held the leading Apple Inc. (NASDAQ:AAPL) stake in Q4 2021, with more than 887 million shares worth $157.5 million. Overall, hedge fund sentiment increased around Apple Inc. (NASDAQ:AAPL) in the fourth quarter, as 134 funds held long positions in the company, up from 120 funds a quarter earlier.
Here is what Alger Spectra Fund has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:
“Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives tight engagement with consumers and enterprises, fostering the growing purchases of high-margin services like music, apps and Apple Pay. Apple’s quarterly earnings exceeded street estimates on strong margin realization driven by a sales mix of more profitable services. The margin strength was even more impressive given significantly higher freight costs and supply constraints that prevented approximately $6 billion in revenue realization.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Alphabet Inc. (NASDAQ:GOOG)’s subsidiary, Google Nest, provides a range of smart home products including smart speakers, streaming devices, smoke detectors, and security systems.
Publishing its Q4 earnings report on February 1, Alphabet Inc. (NASDAQ:GOOG) posted an EPS of $30.69, surpassing estimates by $3.41. Revenue over the period jumped 32.39% year-on-year to $75.33 billion, outperforming estimates by $3.50 billion.
On February 2, Stifel analyst Scott Devitt raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,500 from $3,200 and kept a Buy rating on the shares after the company reported what he called “another strong quarter”, with revenue and operating income approximately 4% ahead of Street estimates.
Elite hedge funds held large stakes in Alphabet Inc. (NASDAQ:GOOG) in Q4 2021. The fourth quarter database of Insider Monkey indicated that 158 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), up from 156 funds in the prior quarter. TCI Fund Management held one of the leading stakes in Alphabet Inc. (NASDAQ:GOOG), with 2.95 million shares worth $8.5 billion.
Here is what Polen Focus Growth has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2021 investor letter:
“For the full year, the top performers included Alphabet. Alphabet’s business continues to compound at what we believe to be a healthy rate. The company reported a 40% increase in third-quarter revenues year over year and likely earned approximately $70 billion in incremental revenue in 2021.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Amazon.com, Inc. (NASDAQ:AMZN)’s Echo smart speakers can control several smart devices, acting as a home automation hub, using the company’s intelligent personal assistant service Alexa.
On February 3, Amazon.com, Inc. (NASDAQ:AMZN) declared its Q4 results, posting earnings per share of $27.75, exceeding estimates by $24.09. The $137.41 billion revenue gained 9.44% year-over-year.
Tigress Financial analyst Ivan Feinseth raised the price target on Amazon.com, Inc. (NASDAQ:AMZN) on February 18 to $4,655 from $4,460 and kept a Buy rating on the shares. Amazon.com, Inc. (NASDAQ:AMZN) overcame fears that the company was headed for a slowdown by reporting “record results”, driven by a strong holiday quarter. The analyst sees Amazon.com, Inc. (NASDAQ:AMZN) continuing to benefit from “powerful growth drivers” that include Amazon Prime and AWS cloud growth, and building on its strong growth momentum in 2022.
Hedge fund sentiment was bullish around Amazon.com, Inc. (NASDAQ:AMZN) in Q4 2021, as the number of long positions held by elite funds in the company increased to 279 from 242 in the prior quarter. Fisher Asset Management held a $7.2 billion stake in Amazon.com, Inc. (NASDAQ:AMZN), and is one of the leading shareholders of the company.
Here is what Polen Focus Growth has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2021 investor letter:
“Amazon has lagged over the past year and a half. The company now must surpass the substantial revenue windfall it achieved in 2020 while also managing supply chain disruptions, wage inflation, and investments to further distance itself from its competition and serve heightened demand. We feel these headwinds are short-term and transitory. Amazon’s first-party ecommerce business is a low (actually negative) margin business, and these short-term investments and inefficiencies are pushing it further into the red. However, the now large, faster-growing, higher-margin businesses like Amazon Prime, AWS, and advertising should allow margins to move much higher over time.
Our view of long-term growth and margin expansion potential for Amazon remains unchanged, and the valuation has only become more attractive. According to our research, if our expectations for free cash flow growth over the next five years materialize, then Amazon has the potential to deliver among the highest returns across our Focus Growth portfolio. It is now our second-largest position, just behind Alphabet.”
You can also take a look at 10 Best AI Stocks for 2022 and 10 Metaverse Stocks to Invest In.
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Disclosure: None. 10 Smart Home Technology Stocks To Buy Today is originally published on Insider Monkey.
