Acuity Brands (AYI) AI Stock Analysis

• Market Cap: $9.67B
• Dividend Yield: 0.18%
• Average Volume (3M): 399.40K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.18
• Revenue Growth: 13.14%
• EPS Growth: -6.09%
• Country: US
• Employees: 13,200
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 4.69
• Shares Outstanding: 30,662,620
• 10 Day Avg. Volume: 470,653
• 30 Day Avg. Volume: 399,402
• PEG Ratio: -4.19
• Price to Book (P/B): 3.70
• Price to Sales (P/S): 2.32
• P/FCF Ratio: 18.90
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.22
• Enterprise Value/Gross Profit: 4.62
• Enterprise Value/Ebitda: 14.90
• 1Y Price Target: $401.25
• Price Target Upside: 27.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 19.84
• Revenue Forecast (FY): $4.74B

• Rating: 70 Outperform
• Price Target: $343.00 ▲(8.80% Upside)

Score is supported primarily by strong financial quality (margins, ROE, and cash generation) and a constructive earnings update (growth, margin expansion, guidance reiterated, and ongoing debt paydown). These positives are tempered by clearly bearish/oversold technicals and a valuation that is not particularly cheap with a minimal dividend yield.

Positive Factors

Free Cash Flow Strength

Consistent, high free cash flow and strong TTM FCF growth support durable capital allocation: funds ongoing buybacks, debt repayments and reinvestment. High FCF conversion vs. earnings provides resilience through cycles and underpins balance sheet flexibility and strategic optionality.

Sustained Margin and ROE Profile

Elevated gross and net margins combined with mid‑teens-plus ROE indicate durable operational efficiency and pricing/scale advantages in lighting and controls. These robust margins provide a buffer against demand volatility and support long‑term reinvestment and shareholder returns.

AIS/Integration Momentum

Rapid AIS growth and high margins reflect successful integration (including QSC) and differentiated intelligent‑space capabilities. Enterprise customer wins for integrated solutions signal durable competitive positioning in smart building systems and recurring software/service revenue expansion.

Negative Factors

Elevated Acquisition‑Related Leverage

Remaining QSC‑related debt and an upward drift in leverage versus prior years reduces financial flexibility. Ongoing repayments improve the profile but near‑term leverage constrains capital deployment, increases interest exposure, and tightens the margin for error during demand slowdowns.

Tariff and Policy Uncertainty

Recurring, unpredictable tariff decisions and legal uncertainty create structural margin volatility and complicate long‑term pricing strategies. Persistent policy risk can impair supply‑chain planning, cost pass‑through, and investment decisions for products with global components.

Choppy Revenue and Backlog Normalization

Inconsistent top‑line trends and reliance on accelerated orders create limited revenue visibility. Backlog normalization can mute near‑term comps and reveal true end‑market demand, making capacity planning and margin leverage less predictable and challenging long‑term growth forecasting.

Acuity Brands Business Overview & Revenue Model

Company Description

Acuity Brands, Inc. provides lighting and building management solutions in North America and internationally. The company operates through two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the Lithonia Lighting, Holophane, Peerless, Gotham, Mark Architectural Lighting, Winona Lighting, Juno, Indy, Aculux, Healthcare Lighting, Hydrel, American Electric Lighting, Sunoptics, eldoLED, nLight, Sensor Switch, IOTA, A-Light, Cyclone, Eureka, Lumniaire LED, Luminis, Dark to Light, and RELOC Wiring Solutions brands. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management systems and location-aware applications under the Distech Controls, Atrius, and Rockpile Ventures brands. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

Acuity Brands generates revenue primarily through the sale of lighting products, which includes LED lighting fixtures, controls, and smart building solutions. The company has a robust revenue model supported by multiple key streams, including direct sales to customers, distribution agreements, and partnerships with contractors and architects. Additionally, Acuity Brands benefits from recurring revenue through its building management systems and software solutions, which offer ongoing service and support. The company also leverages strategic partnerships to expand its market reach and enhance product offerings, further contributing to its overall earnings.

Acuity Brands Financial Statement Overview

Summary

High-quality fundamentals: strong and consistent margins, solid ROE, and reliable free-cash-flow conversion with strong TTM FCF growth. Offsets include uneven recent revenue trends, some cooling from FY2024 profitability peaks, and a modest uptick in leverage.

Income Statement

AYI shows solid profitability with consistently strong gross margins (about 42%–48%) and healthy net margins (roughly 9%–11%) across the period. Revenue growth has been choppy—down in FY2023 and FY2024, then recovering to low-single-digit growth in TTM (Trailing-Twelve-Months). Margins have also cooled from FY2024 peaks, with TTM operating profitability running below the last two annual periods, suggesting some mix, pricing, or cost pressure despite stable end-market demand.

Balance Sheet

The balance sheet looks sound with moderate leverage: debt-to-equity remains conservative (roughly 0.24–0.37), even with debt stepping up in the latest two periods versus FY2024. Equity has grown steadily over time, and returns on equity are consistently strong (mid-teens to ~20%), pointing to good capital efficiency. The main watch item is the upward drift in leverage versus FY2023–FY2024, which slightly reduces financial flexibility if demand weakens.

Cash Flow

Cash generation is a clear strength. Free cash flow has been consistently high relative to net income (about 82%–90%), indicating earnings quality and disciplined reinvestment. TTM (Trailing-Twelve-Months) free cash flow growth is strong (+28%), and operating cash flow remains robust in absolute dollars. The key weakness is that operating cash flow has not consistently outpaced net income (coverage below 1.0 in most years, including TTM), implying some working-capital or timing headwinds that can create quarter-to-quarter volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.35B	3.84B	3.95B	4.01B	3.46B
Gross Profit	2.08B	1.78B	1.71B	1.67B	1.48B
EBITDA	655.30M	665.00M	588.50M	603.20M	520.50M
Net Income	396.60M	422.60M	346.00M	384.00M	306.30M
Balance Sheet
Total Assets	4.76B	3.81B	3.41B	3.48B	3.58B
Cash, Cash Equivalents and Short-Term Investments	422.50M	845.80M	397.90M	223.20M	491.30M
Total Debt	1.00B	573.50M	590.80M	596.10M	556.90M
Total Liabilities	2.03B	1.44B	1.39B	1.57B	1.53B
Stockholders Equity	2.72B	2.38B	2.02B	1.91B	2.04B
Cash Flow
Free Cash Flow	533.00M	555.20M	511.40M	259.80M	364.90M
Operating Cash Flow	601.40M	619.20M	578.10M	316.30M	408.70M
Investing Cash Flow	-1.28B	-65.10M	-90.70M	-62.20M	-117.90M
Financing Cash Flow	255.40M	-104.50M	-312.90M	-512.40M	-362.60M

Acuity Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 315.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AYI, the sentiment is Negative. The current price of 315.25 is below the 20-day moving average (MA) of 341.67, below the 50-day MA of 353.31, and below the 200-day MA of 316.53, indicating a bearish trend. The MACD of -13.85 indicates Positive momentum. The RSI at 34.58 is Neutral, neither overbought nor oversold. The STOCH value of 21.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AYI.

Acuity Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENS	79 Outperform	$6.40B	20.27	18.22%	0.67%	6.17%	20.86%
POWL	78 Outperform	$5.07B	28.13	32.17%	0.32%	9.08%	19.86%
NVT	76 Outperform	$17.80B	30.39	8.57%	0.84%	5.31%	5.76%
AEIS	73 Outperform	$9.90B	68.98	11.80%	0.18%	17.18%	235.76%
AYI	70 Outperform	$9.67B	24.26	15.61%	0.18%	13.14%	-6.09%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ATKR	52 Neutral	$2.44B	-137.34	-1.11%	2.02%	-10.98%	-103.99%

Acuity Brands Corporate Events

Acuity Brands Shareholders Reelect Board and Back Pay Policies

At its annual meeting of stockholders held on January 21, 2026, Acuity Inc. shareholders elected nine directors, including Neil M. Ashe and the other board nominees, to one-year terms ending at the 2027 annual meeting or until their successors are elected. Stockholders also ratified the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for fiscal 2026 and approved, on an advisory basis, the compensation of the company’s named executive officers, signaling broad investor support for the current board composition, governance framework, and executive pay practices.

The most recent analyst rating on (AYI) stock is a Buy with a $410.00 price target. To see the full list of analyst forecasts on Acuity Brands stock, see the AYI Stock Forecast page.