Lsi Industries (LYTS) AI Stock Analysis

• Market Cap: $673.10M
• Dividend Yield: 1.07%
• Average Volume (3M): 160.65K
• Price to Earnings (P/E): 26.4
• Beta (1Y): 1.26
• Revenue Growth: 22.35%
• EPS Growth: 2.59%
• Country: US
• Employees: 2,000
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.26
• Shares Outstanding: 31,133,196
• 10 Day Avg. Volume: 165,939
• 30 Day Avg. Volume: 160,654
• PEG Ratio: -4.49
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 0.89
• P/FCF Ratio: 14.68
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.18
• Enterprise Value/Gross Profit: 4.69
• Enterprise Value/Ebitda: 13.61
• 1Y Price Target: $28.50
• Price Target Upside: 31.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.11
• Revenue Forecast (FY): $605.35M

• Rating: 70 Outperform
• Price Target: $24.00 ▲(11.01% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is driven primarily by solid financial fundamentals (strong cash generation and improved leverage) and a constructive earnings outlook (segment momentum and continued deleveraging). These positives are tempered by mixed recent growth (TTM revenue decline/flat near-term top line), only moderate technical momentum, and a relatively high P/E with a modest dividend yield.

Positive Factors

Deleveraged balance sheet

LSI’s materially reduced leverage and sizable cash/availability provide durable financial flexibility. A low debt load and 0.4x net leverage support capital allocation for organic investment, dividends, and M&A while lowering refinancing risk, enabling the company to absorb cyclical demand swings.

Strong free cash flow generation

Consistent positive operating and free cash flow—with FCF closely tracking earnings—indicates high cash conversion and earnings quality. This durable cash generation funds working capital, deleveraging, dividends, and targeted M&A without excessive equity dilution, strengthening long-term financial resilience.

Transformational acquisition expands scale

The Royston acquisition substantially scales Display Solutions, adding revenue, manufacturing capacity and nearly 900 employees. It increases cross-selling scope and recurring remodel-driven revenue exposure, structurally shifting LSI toward a larger, more diversified platform with potential margin and market-share upside.

Negative Factors

Top-line growth inconsistency

Revenue volatility and recent TTM decline highlight sensitivity to customer capex cycles and one-off event pull-forwards. Persistently uneven organic growth limits operating leverage, increases reliance on cost improvements or acquisitions to hit targets, and elevates execution risk over the medium term.

Vertical concentration and timing risk

Heavy exposure to grocery, petroleum and QSR remodel cycles creates structural revenue concentration and timing uncertainty. When key verticals pause or shift priorities, project rollouts and revenue recognition can lag, producing durable volatility in orders, backlog realization, and near-term organic growth.

Pro forma leverage spike from acquisition

Funding the Royston deal materially increases pro forma leverage to ~3x, raising financial and refinancing risk until planned deleveraging occurs. Higher debt levels could constrain strategic flexibility, elevate interest costs, and increase sensitivity to macro shocks or integration setbacks over the next several quarters.

Lsi Industries Business Overview & Revenue Model

Company Description

LSI Industries Inc. manufactures and sells non-residential lighting and retail display solutions in the United States, Canada, Mexico, Australia, and Latin America. It operates in two segments, Lighting and Display Solutions. The Lighting segment manufactures, markets, and sells non-residential outdoor and indoor lighting solutions. It also offers lighting control products, including sensors, photocontrols, dimmers, motion detection, and Bluetooth systems to support lighting fixtures; and designs, engineers, and manufactures electronic circuit boards, assemblies, and sub-assemblies. The Display Solutions segment manufactures, sells, and installs exterior and interior visual image and display elements, including printed and structural graphics, digital signage, menu board systems, display fixtures, refrigerated displays, and custom display elements. Its products comprise signage and canopy graphics, pump dispenser graphics, building fascia graphics, decals, interior signage and marketing graphics, aisle markers, wall mural graphics, and refrigerated and non-refrigerated merchandising displays. This segment also implements, installs, and provides program management services, such as installation management, site surveys, permitting, and content management; and manages and executes the implementation of large rollout programs. It serves petroleum/convenience, parking lot and garage, quick-service restaurant, retail and grocery store, automotive, warehouse, and sports complex markets. The company was founded in 1976 and is headquartered in Cincinnati, Ohio.

How the Company Makes Money

Lsi Industries generates revenue primarily through the sale of its lighting and graphics products. The company benefits from a diversified revenue model encompassing direct sales to end-users, distribution partnerships, and collaborations with electrical contractors and wholesalers. Key revenue streams include the sale of LED lighting systems, fixtures, and related controls, as well as graphics solutions that cater to signage needs. Additionally, Lsi Industries has established strategic partnerships with other firms in the construction and design industries, enhancing its market reach and allowing for bundled solutions that attract larger clients. The growing trend towards energy-efficient and sustainable lighting solutions further contributes to the company's earnings, as customers increasingly seek to reduce energy costs and comply with environmental regulations.

Lsi Industries Financial Statement Overview

Summary

Balance sheet and cash flow are clear strengths (low debt, healthy ROE, strong recent free cash flow and debt reduction). Offsetting this, TTM revenue is down (~12%) and margins are below prior-year peaks, indicating some recent demand and/or cost pressure.

Income Statement

Profitability is solid with TTM (Trailing-Twelve-Months) gross margin ~25% and net margin ~4% (EBITDA margin ~9%). However, growth has turned mixed: after strong annual revenue growth in FY2025 (~22%), TTM (Trailing-Twelve-Months) revenue is down ~12%, and margins are lower than FY2023–FY2024 levels, suggesting some recent pricing/volume or cost pressure.

Balance Sheet

Leverage has improved meaningfully: total debt is low in TTM (Trailing-Twelve-Months) (~$28M) and debt relative to equity is modest (~0.11) versus higher levels in prior years. Equity has grown over time and returns on equity remain healthy (~11% TTM), though not at the peak seen in FY2023, indicating a slightly less efficient earnings profile recently despite a stronger capital structure.

Cash Flow

Cash generation is a strength: TTM (Trailing-Twelve-Months) operating cash flow (~$42M) and free cash flow (~$38M) are positive, with very strong TTM free-cash-flow growth. Free cash flow is broadly in line with earnings (about 86% of net income), supporting earnings quality. The main weakness is variability across years (notably negative operating/free cash flow in FY2022), implying working-capital or cycle sensitivity.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	591.80M	573.38M	469.64M	496.98M	455.12M	315.61M
Gross Profit	149.50M	141.78M	133.17M	136.94M	109.21M	78.97M
EBITDA	51.52M	48.74M	45.25M	46.68M	31.17M	16.32M
Net Income	25.67M	24.38M	24.98M	25.76M	15.03M	5.87M
Balance Sheet
Total Assets	396.31M	396.36M	348.80M	296.15M	311.08M	286.82M
Cash, Cash Equivalents and Short-Term Investments	0.00	3.46M	4.11M	1.83M	2.46M	2.28M
Total Debt	27.94M	66.64M	72.02M	45.96M	90.63M	82.28M
Total Liabilities	148.21M	165.64M	144.44M	118.57M	163.31M	155.65M
Stockholders Equity	248.10M	230.72M	204.35M	177.58M	147.77M	131.17M
Cash Flow
Free Cash Flow	37.75M	34.65M	38.00M	46.38M	-5.99M	25.78M
Operating Cash Flow	42.04M	38.12M	43.39M	49.59M	-3.86M	28.01M
Investing Cash Flow	-28.52M	-27.97M	-55.25M	-3.20M	-1.57M	-92.96M
Financing Cash Flow	-12.66M	-11.43M	14.31M	-47.15M	5.63M	63.58M

Lsi Industries Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 21.62
• 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 LYTS, the sentiment is Neutral. The current price of 21.62 is below the 20-day moving average (MA) of 22.18, above the 50-day MA of 20.60, and above the 200-day MA of 19.73, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 43.96 is Neutral, neither overbought nor oversold. The STOCH value of 43.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LYTS.

Lsi Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LYTS	70 Outperform	$673.10M	26.39	11.03%	1.07%	22.35%	2.59%
BHE	66 Neutral	$2.06B	84.44	3.37%	1.44%	-2.93%	-40.33%
DAKT	66 Neutral	$1.26B	190.12	2.64%	―	-6.13%	-76.92%
RELL	64 Neutral	$175.78M	185.50	0.11%	2.25%	6.17%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MEI	56 Neutral	$299.55M	-4.78	-8.87%	5.93%	-9.51%	29.57%
VPG	55 Neutral	$611.77M	116.49	2.37%	―	-7.46%	-39.98%

Lsi Industries Corporate Events

LSI Industries Announces Transformational Acquisition of Royston Group

On February 20, 2026, LSI Industries agreed to acquire privately held SRR Holdings’ Royston Group for $325 million, with $320 million to be paid in cash and $5 million in LSI stock, subject to working capital adjustments. The deal, announced publicly on February 25, 2026, remains contingent on Hart-Scott-Rodino clearance and other customary conditions, and is expected to close in the third quarter of LSI’s 2026 fiscal year.

Royston, a vertically integrated provider of custom store fixtures, signage and refrigerated or heated display cases, will be folded into LSI’s display solutions segment, adding five U.S. facilities and nearly 900 employees to the combined platform. LSI plans to fund the acquisition and related costs primarily through an expanded senior secured credit facility of up to $425 million, anchored by a five-year term loan, a one-year term loan and a larger revolving credit line secured by substantially all of the company’s and its subsidiaries’ personal property.

With Royston’s trailing twelve-month revenue of about $272 million and adjusted EBITDA of roughly $38 million through September 2025, the transaction implies a multiple of 8.1 times adjusted EBITDA and is projected to be accretive to LSI’s margins and diluted earnings per share upon closing. Pro forma, LSI estimates combined trailing twelve-month revenue of approximately $864 million and adjusted EBITDA of about $95 million, with net leverage expected to be around three times at closing and management targeting deleveraging over the near to medium term.

Management sees the acquisition as transformational, positioning LSI as a leading scaled platform in branded retail solutions with minimal overlap between the two companies’ customer bases. The combined business is expected to derive more than 60% of pro forma annual revenue from refueling, grocery and quick-service restaurant markets, where Royston has long-standing relationships and a recurring remodel-driven revenue model, reinforcing LSI’s push into higher-growth, higher-margin verticals.

The deal significantly extends LSI’s domestic manufacturing footprint from 18 to 23 facilities and nearly 40% more manufacturing space, enabling capacity for organic growth and cross-selling opportunities across lighting, fixtures, signage and display cases. Management highlights substantial commercial synergies given that nearly half of Royston’s customers currently buy a single product, creating scope to deepen share of wallet by offering integrated solutions across both companies’ product lines and advancing LSI’s Fast Forward value creation plan.

The most recent analyst rating on (LYTS) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Lsi Industries stock, see the LYTS Stock Forecast page.

LSI Industries Reports Solid Q2 Results and Dividend

On January 22, 2026, LSI Industries reported fiscal 2026 second-quarter results for the period ended December 31, 2025, posting flat year-on-year sales of $147.0 million while absorbing the fade-out of prior-year, event-driven grocery revenues, and delivering net income of $6.3 million ($0.20 per diluted share), adjusted net income of $8.4 million ($0.26 adjusted diluted EPS), adjusted EBITDA of $13.4 million, and robust free cash flow of $23.3 million. Management highlighted double-digit growth and margin expansion in the Lighting segment, stabilizing demand in the grocery vertical, improving project momentum in Display Solutions, and a strengthened balance sheet marked by a leverage ratio of 0.4x net debt to trailing 12-month adjusted EBITDA and $103.4 million of liquidity, while the board declared a $0.05 per-share quarterly dividend payable February 10, 2026, underscoring the company’s capacity to fund organic growth, pursue acquisitions and sustain shareholder returns.

The most recent analyst rating on (LYTS) stock is a Buy with a $21.50 price target. To see the full list of analyst forecasts on Lsi Industries stock, see the LYTS Stock Forecast page.