Acuity Brands (AYI) AI Stock Analysis

• Market Cap: $10.37B
• Dividend Yield: 0.2%
• Average Volume (3M): 255.81K
• Price to Earnings (P/E): 26.7
• Beta (1Y): 1.27
• Revenue Growth: 9.16%
• EPS Growth: 4.09%
• Country: US
• Employees: 13,200
• Sector: Industrials
• Sector Strength: 73
• Industry: Electrical Equipment & Parts
• EPS (TTM): 5.12
• Shares Outstanding: 30,644,833
• 10 Day Avg. Volume: 217,322
• 30 Day Avg. Volume: 255,808
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 2.14
• Enterprise Value/Gross Profit: 4.51
• Enterprise Value/Ebitda: 14.19
• 1Y Price Target: $358.40
• Price Target Upside: 6.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 75 Outperform
• Price Target: $382.00 ▲(13.20% Upside)

Acuity Brands' strong earnings performance and positive technical indicators are the primary drivers of its stock score. Despite a high valuation and some operational challenges, the company's strategic growth initiatives and robust financial health support a favorable outlook.

Positive Factors

Financial Performance

There was a significant improvement in gross margin due to structural drivers, such as improved volume leverage on productivity and a positive product mix.

Market Position

The company's strategic positioning and tariff de-escalation are expected to be tailwinds for financial performance.

Strategic Positioning

Acuity Brands is seen as competitively advantaged compared to low-cost Chinese competitors due to its USMCA-compliant Mexican production.

Negative Factors

Guidance and Margins

Fiscal 2025 guidance was maintained despite the third-quarter beat, as the fourth quarter will see pull-forward giveback and lower gross margins as tariffs are passed on dollar for dollar.

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. is a leading provider of innovative lighting and building management solutions headquartered in Atlanta, Georgia. The company operates primarily in the North American market and focuses on the design and manufacturing of indoor and outdoor lighting fixtures, controls, and related products for commercial, industrial, and residential applications. Acuity Brands' product portfolio includes LED lighting systems, smart lighting controls, and energy management systems, catering to the evolving demands for energy efficiency and sustainability in the built environment.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.17B	3.84B	3.95B	4.01B	3.46B	3.33B
Gross Profit	1.98B	1.78B	1.71B	1.67B	1.48B	1.40B
EBITDA	628.50M	665.00M	588.50M	603.20M	520.50M	479.30M
Net Income	401.50M	422.60M	346.00M	384.00M	306.30M	248.30M
Balance Sheet
Total Assets	4.65B	3.81B	3.41B	3.48B	3.58B	3.49B
Cash, Cash Equivalents and Short-Term Investments	371.80M	845.80M	397.90M	223.20M	491.30M	560.70M
Total Debt	1.09B	573.50M	495.60M	513.00M	494.30M	401.10M
Total Liabilities	2.06B	1.44B	1.39B	1.57B	1.53B	1.36B
Stockholders Equity	2.58B	2.38B	2.02B	1.91B	2.04B	2.13B
Cash Flow
Free Cash Flow	506.40M	555.20M	511.40M	259.80M	364.90M	449.90M
Operating Cash Flow	573.00M	619.20M	578.10M	316.30M	408.70M	504.80M
Investing Cash Flow	-1.27B	-65.10M	-90.70M	-62.20M	-117.90M	-359.80M
Financing Cash Flow	373.60M	-104.50M	-312.90M	-512.40M	-362.60M	-50.30M

Acuity Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 337.47
• 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 337.47 is above the 20-day moving average (MA) of 326.07, above the 50-day MA of 311.86, and above the 200-day MA of 292.92, indicating a bullish trend. The MACD of 8.04 indicates Negative momentum. The RSI at 64.24 is Neutral, neither overbought nor oversold. The STOCH value of 75.32 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	$3.89B	11.85	19.13%	0.92%	3.73%	32.29%
POWL	80 Outperform	$3.24B	18.63	34.00%	0.39%	14.32%	33.76%
NVT	80 Outperform	$14.94B	26.41	7.53%	0.85%	-4.84%	2.33%
AYI	75 Outperform	$10.37B	26.66	16.60%	0.20%	9.16%	4.09%
AEIS	75 Outperform	$5.79B	69.75	7.04%	0.26%	8.49%	-7.65%
ATKR	65 Neutral	$1.99B	19.03	7.29%	2.22%	-12.09%	-78.18%
Sector *	64 Neutral	$10.75B	15.57	7.24%	2.01%	2.80%	-14.32%

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.