tiprankstipranks
Trending News
More News >
Acuity Brands Inc (AYI)
:AYI
Advertisement

Acuity Brands (AYI) AI Stock Analysis

Compare
388 Followers

Top Page

AYI

Acuity Brands

(NYSE:AYI)

Rating:69Neutral
Price Target:
$335.00
▲(10.74%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
AYI is seen as competitively advantaged compared to low-cost Chinese competitors due to its USMCA-compliant Mexican production.
Earnings Potential
Analysts have increased confidence in the company's earnings potential, driven by gross margin improvements.
Market Positioning
Acuity Brands is positioned for growth due to a strong opportunity for gaining market share.
Negative Factors
Fiscal Guidance
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 (AYI) vs. SPDR S&P 500 ETF (SPY)

Acuity Brands Business Overview & Revenue Model

Company DescriptionAcuity 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 MoneyAcuity Brands makes money primarily through the sale of its lighting and building management products and solutions. The company's revenue streams are driven by the manufacturing and distribution of lighting fixtures, lighting controls, and building management systems. Acuity Brands serves a diverse customer base which includes electrical distributors, retail home improvement centers, lighting showrooms, and various other commercial and industrial customers. The company also benefits from strategic partnerships and collaborations with technology partners to enhance its product offerings with advanced digital solutions. Additionally, Acuity Brands focuses on expanding its market presence through acquisitions and investments in new technologies to drive growth and increase its market share.

Acuity Brands Earnings Call Summary

Earnings Call Date:Jun 26, 2025
(Q3-2025)
|
% Change Since: 5.29%|
Next Earnings Date:Oct 01, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant growth in sales and profitability, driven by effective integration of QSC and new product launches. However, there are concerns about the impact of tariffs and challenges in specific segments, which may affect future margins.
Q3-2025 Updates
Positive Updates
Strong Third Quarter Financial Performance
Net sales increased by 22% to $1.2 billion, adjusted operating profit rose by 33% to $222 million, and adjusted diluted EPS increased by 23% to $5.12.
Growth in Acuity Intelligence Spaces (AIS)
AIS delivered sales growth of 21% for Atrius and Distech combined, and QSC grew over 20% year-over-year. AIS achieved an adjusted operating profit margin of 23.6%.
Successful Integration of QSC
QSC demonstrated strong performance with accelerated revenue growth and expanded margins due to the adoption of Acuity’s operating practices.
Introduction of New Products and Technologies
Launched SensorSwitch Air and the animate controller by nLight, enhancing lighting control solutions. Acquired M3 Innovation to strengthen the Flood Light portfolio.
Recognition and Awards
Products like Nightingale Embrace and Pelican by Luminis received accolades, including Red Dot product design awards.
Strong Cash Flow and Capital Allocation
Generated $400 million in cash flow from operations, repaid $100 million of term loan, increased dividend by 13%, and repurchased approximately 344,000 shares.
Negative Updates
Impact of Tariff Policy
Took strategic pricing actions to cover the dollar impact of tariffs, with expectations of order acceleration ahead of price increases. Tariffs have impacted financial performance, particularly in the Pro Audio segment.
Challenges in Corporate Accounts Segment
Declines in corporate accounts due to the timing of renovations of a large retailer, impacting sales in the ABL segment.
Potential Margin Dilution
The company expects some margin dilution in the fourth quarter due to the full realization of tariff costs and strategic pricing actions.
Company Guidance
During the Acuity Fiscal 2025 Third Quarter Earnings Call, the company reported notable financial achievements, including a 22% year-over-year increase in net sales, amounting to $1.2 billion. The adjusted operating profit grew by 33% to $222 million, and the adjusted operating profit margin expanded by 150 basis points to 18.8%. Furthermore, adjusted diluted earnings per share rose by 23% to $5.12. Acuity emphasized strategic actions such as price increases to offset evolving tariff impacts and productivity efforts to enhance operational efficiency. The company's Acuity Brands Lighting segment achieved $923 million in sales, up 3% annually, while the Acuity Intelligence Spaces segment reported $264 million in sales with a 23.6% operating profit margin, showcasing robust growth in both core segments.

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
75
Positive
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
70
Positive
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
68
Positive
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.
BreakdownSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue3.84B3.95B4.01B3.46B3.33B
Gross Profit1.78B1.71B1.67B1.48B1.40B
EBITDA665.00M588.50M603.20M520.50M479.30M
Net Income422.60M346.00M384.00M306.30M248.30M
Balance Sheet
Total Assets3.81B3.41B3.48B3.58B3.49B
Cash, Cash Equivalents and Short-Term Investments845.80M397.90M223.20M491.30M560.70M
Total Debt573.50M495.60M513.00M494.30M401.10M
Total Liabilities1.44B1.39B1.57B1.53B1.36B
Stockholders Equity2.38B2.02B1.91B2.04B2.13B
Cash Flow
Free Cash Flow555.20M511.40M259.80M364.90M449.90M
Operating Cash Flow619.20M578.10M316.30M408.70M504.80M
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 Price302.51
Price Trends
50DMA
280.53
Positive
100DMA
267.67
Positive
200DMA
291.37
Positive
Market Momentum
MACD
4.27
Positive
RSI
62.27
Neutral
STOCH
60.54
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 302.51 is above the 20-day moving average (MA) of 298.35, above the 50-day MA of 280.53, and above the 200-day MA of 291.37, indicating a bullish trend. The MACD of 4.27 indicates Positive momentum. The RSI at 62.27 is Neutral, neither overbought nor oversold. The STOCH value of 60.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AYI.

Acuity Brands Risk Analysis

Acuity Brands disclosed 23 risk factors in its most recent earnings report. Acuity Brands reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Acuity Brands Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$3.64B10.4919.82%1.26%1.00%38.51%
79
Outperform
$12.62B21.887.63%1.03%-5.12%1.69%
77
Outperform
$2.84B16.5237.08%0.45%27.43%67.93%
77
Outperform
$2.62B15.0112.73%1.65%-12.02%-67.69%
76
Outperform
$5.38B73.816.36%0.35%0.06%-28.32%
69
Neutral
$9.27B23.8416.60%0.27%9.16%4.09%
67
Neutral
€8.36B21.116.46%2.82%1.86%-38.90%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AYI
Acuity Brands
302.51
58.01
23.73%
AEIS
Advanced Energy
142.84
34.63
32.00%
ENS
EnerSys
94.40
-12.81
-11.95%
POWL
Powell Industries
234.95
101.89
76.57%
ATKR
Atkore International Group
77.96
-55.17
-41.44%
NVT
nVent Electric
76.63
7.11
10.23%

Acuity Brands Corporate Events

Business Operations and Strategy
Acuity Brands Announces Corporate Name Change to Acuity Inc.
Positive
Mar 12, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025