Acuity Brands (AYI) AI Stock Analysis

• Market Cap: $9.27B
• Dividend Yield: 0.27%
• Average Volume (3M): 330.60K
• Price to Earnings (P/E): 23.8
• Beta (1Y): 1.29
• Revenue Growth: 9.16%
• EPS Growth: 4.09%
• Country: US
• Employees: 13,200
• Sector: Industrials
• Sector Strength: 94
• Industry: Electrical Equipment & Parts
• EPS (TTM): 5.12
• Shares Outstanding: 30,644,833
• 10 Day Avg. Volume: 235,368
• 30 Day Avg. Volume: 330,599
• PEG Ratio: -6.01
• Price to Book (P/B): 3.46
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.54
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.60
• Enterprise Value/Gross Profit: 4.84
• Enterprise Value/Ebitda: 3.75
• 1Y Price Target: $337.50
• Price Target Upside: 11.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 69 Neutral
• 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 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 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 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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 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: 302.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENS	80 Outperform	$3.64B	10.49	19.82%	1.26%	1.00%	38.51%
NVT	79 Outperform	$12.62B	21.88	7.63%	1.03%	-5.12%	1.69%
POWL	77 Outperform	$2.84B	16.52	37.08%	0.45%	27.43%	67.93%
ATKR	77 Outperform	$2.62B	15.01	12.73%	1.65%	-12.02%	-67.69%
AEIS	76 Outperform	$5.38B	73.81	6.36%	0.35%	0.06%	-28.32%
AYI	69 Neutral	$9.27B	23.84	16.60%	0.27%	9.16%	4.09%
Sector *	67 Neutral	€8.36B	21.11	6.46%	2.82%	1.86%	-38.90%

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.