Acuity Brands (AYI) AI Stock Analysis

• Market Cap: $9.62B
• Dividend Yield: 0.21%
• Average Volume (3M): 279.42K
• Price to Earnings (P/E): 24.7
• Beta (1Y): 1.28
• Revenue Growth: 9.16%
• EPS Growth: 4.09%
• Country: US
• Employees: 13,200
• Sector: Industrials
• Sector Strength: 78
• Industry: Electrical Equipment & Parts
• EPS (TTM): 5.12
• Shares Outstanding: 30,644,833
• 10 Day Avg. Volume: 251,130
• 30 Day Avg. Volume: 279,419
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 2.14
• Enterprise Value/Gross Profit: 4.51
• Enterprise Value/Ebitda: 14.19
• 1Y Price Target: $337.00
• Price Target Upside: 5.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 69 Neutral
• Price Target: $335.00 ▲(4.89% Upside)

Acuity Brands' strong earnings call performance and solid financials are key strengths, driving the score. However, mixed technical indicators and a high valuation relative to industry norms pose potential risks. Tariff impacts and segment challenges remain concerns for future performance.

Positive Factors

Competitive Advantage

Acuity Brands is seen as competitively advantaged compared to low-cost Chinese competitors due to its USMCA-compliant Mexican production, supporting pricing power and share gain.

Financial Performance

There is an expectation of significant gross margin improvement, which supports positive revisions and potential stock price increases.

Market Shift

U.S. imports of non-residential light fixtures have been shifting towards Mexico and away from China, benefiting Acuity Brands.

Negative Factors

Mixed Business Conditions

Business conditions remain mixed, and there is concern about the back half of calendar 2025.

Revenue Seasonality

There is a risk for Acuity of below-average revenue seasonality during the second half if project pull-forward was meaningful.

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, controls, and system solutions. The company's revenue model is built on both direct sales to end customers and distribution through a network of electrical wholesalers and retailers. Key revenue streams include the sale of LED lighting fixtures, smart lighting controls, and building management systems, which are increasingly in demand due to the global shift towards energy-efficient technologies. Additionally, Acuity Brands benefits from partnerships with technology firms and other stakeholders in the construction and real estate sectors, which enhance its reach and capabilities. The company's ongoing investment in research and development allows it to stay at the forefront of innovation, thus driving sales through new product introductions and enhancements that meet changing customer needs.

Acuity Brands Financial Statement Overview

Summary

Acuity Brands displays robust financial performance with consistent revenue growth and strong profitability, evidenced by a net profit margin of 9.63%. The balance sheet is solid with moderate leverage, but increased debt levels and slight declines in free cash flow growth require monitoring.

Income Statement

Acuity Brands has shown consistent revenue growth over the years with a 8.53% increase in the most recent TTM period. The company maintains strong profitability with a TTM gross profit margin of 47.40% and a net profit margin of 9.63%. The EBIT margin stands at 12.96%, and the EBITDA margin is 15.08%, indicating efficient operations. However, the slight decrease in EBIT from the previous year reflects some operational challenges.

Balance Sheet

The balance sheet shows a solid equity position with a debt-to-equity ratio of 0.42, highlighting moderate leverage. The return on equity (ROE) of 15.53% is healthy, indicating effective use of equity. The equity ratio is at 55.63%, suggesting a strong financial structure. However, the increase in total debt over the most recent period could present future risk if not managed carefully.

Cash Flow

Acuity Brands has strong cash flow generation with a TTM operating cash flow to net income ratio of 1.43, demonstrating effective cash conversion. The free cash flow to net income ratio is 1.26, underscoring robust cash flow management. However, there has been a slight decline in free cash flow growth compared to the previous year, which could indicate pressure on cash reserves.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.84B	3.95B	4.01B	3.46B	3.33B
Gross Profit	1.78B	1.71B	1.67B	1.48B	1.40B
EBITDA	665.00M	588.50M	603.20M	520.50M	479.30M
Net Income	422.60M	346.00M	384.00M	306.30M	248.30M
Balance Sheet
Total Assets	3.81B	3.41B	3.48B	3.58B	3.49B
Cash, Cash Equivalents and Short-Term Investments	845.80M	397.90M	223.20M	491.30M	560.70M
Total Debt	573.50M	495.60M	513.00M	494.30M	401.10M
Total Liabilities	1.44B	1.39B	1.57B	1.53B	1.36B
Stockholders Equity	2.38B	2.02B	1.91B	2.04B	2.13B
Cash Flow
Free Cash Flow	555.20M	511.40M	259.80M	364.90M	449.90M
Operating Cash Flow	619.20M	578.10M	316.30M	408.70M	504.80M
Investing Cash Flow	-65.10M	-90.70M	-62.20M	-117.90M	-359.80M
Financing Cash Flow	-104.50M	-312.90M	-512.40M	-362.60M	-50.30M

Acuity Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 319.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AYI, the sentiment is Positive. The current price of 319.38 is above the 20-day moving average (MA) of 310.53, above the 50-day MA of 297.15, and above the 200-day MA of 292.16, indicating a bullish trend. The MACD of 6.55 indicates Negative momentum. The RSI at 59.25 is Neutral, neither overbought nor oversold. The STOCH value of 56.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AYI.

Acuity Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENS	80 Outperform	$3.68B	11.22	19.13%	0.96%	3.73%	32.29%
POWL	80 Outperform	$3.07B	17.68	34.00%	0.41%	14.32%	33.76%
NVT	80 Outperform	$14.16B	25.05	7.53%	0.88%	-4.84%	2.33%
AEIS	75 Outperform	$5.70B	68.69	7.04%	0.26%	8.49%	-7.65%
AYI	69 Neutral	$9.62B	24.73	16.60%	0.21%	9.16%	4.09%
ATKR	65 Neutral	$1.95B	18.58	7.29%	2.24%	-12.09%	-78.18%
Sector *	65 Neutral	$2.66B	15.28	15.18%	3.69%	0.27%	26.17%

Acuity Brands Corporate Events

Acuity Brands Announces Corporate Name Change to Acuity Inc.

On March 11, 2025, Acuity Brands, Inc. announced a corporate name change to Acuity Inc., effective March 26, 2025, as part of a rebranding strategy to align its business segments and promote a cohesive brand experience. This change reflects the company’s evolution and its strategy for growth, positioning Acuity as an innovator and disruptor in the industry, with a focus on creating stakeholder value and compounding shareholder wealth.