Acuity Brands (AYI) AI Stock Analysis

• Market Cap: $7.23B
• Dividend Yield: 0.27%
• Average Volume (3M): 492.13K
• Price to Earnings (P/E): 17.7
• Beta (1Y): 1.23
• Revenue Growth: 2.78%
• EPS Growth: 11.53%
• Country: US
• Employees: 13,200
• Sector: Industrials
• Sector Strength: 70
• Industry: Electrical Equipment & Parts
• EPS (TTM): 13.19
• Shares Outstanding: 30,904,947
• 10 Day Avg. Volume: 712,386
• 30 Day Avg. Volume: 492,129
• PEG Ratio: 1.54
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.12
• Price to Cash Flow (P/CF): 15.50
• P/FCF Ratio: 15.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $308.75
• Price Target Upside: 28.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

Acuity Brands presents a solid financial foundation with strong profitability and strategic growth initiatives, particularly in the Intelligent Spaces segment. However, technical indicators suggest potential downside risks, and the stock's valuation indicates moderate pricing. Positive earnings call highlights and strategic rebranding efforts support future growth prospects, though tariff challenges and ABL segment declines pose risks.

Positive Factors

Competitive Positioning

Acuity is better positioned relative to competitors to weather tariff disruption due to its global supply chain.

Gross Margin Performance

The sizeable gross margin beat in FQ2 signals potential upside in the second half of the fiscal year.

Tariff Exemption

Acuity Brands is expected to benefit from the exemption of USMCA-compliant goods from tariffs, unlike its Asia-based competitors.

Negative Factors

Demand Uncertainty

Uncertainty on demand impact related to tariffs.

Project Activity Risk

The biggest near-term risk is tariffs impacting project timing and gross margins.

Tariff Impact

There could be a negative gross margin percent impact by passing along tariffs dollar for dollar, and a lag between AYI raising prices and paying tariffs.

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 its comprehensive lighting and building management solutions. The company's key revenue streams include the sale of lighting fixtures, lighting controls, and related components. Acuity Brands leverages advanced technologies, such as LED and IoT-enabled smart lighting solutions, to offer energy-efficient and cost-effective products. Additionally, the company benefits from strategic partnerships and a robust distribution network that includes electrical distributors, retail outlets, and online platforms. Acuity's earnings are further supported by demand for energy-efficient solutions driven by regulatory requirements and sustainability initiatives across various industries.

Acuity Brands Financial Statement Overview

Summary

Acuity Brands demonstrates strong profitability with stable margins and consistent revenue growth, though there is room for improvement in ROE and free cash flow stability.

Income Statement

Acuity Brands demonstrates strong profitability with a stable Gross Profit Margin and an improved EBIT Margin over the years. The company shows consistent revenue growth from 2020 to 2024 despite a slight decline in 2023. The Net Profit Margin has also remained healthy, indicating efficient cost management.

Balance Sheet

The balance sheet shows a solid Equity Ratio, reflecting a strong equity base relative to assets. Additionally, the Debt-to-Equity Ratio remains low, indicating prudent leverage management. However, the Return on Equity (ROE) shows moderate performance, suggesting room for improvement in generating returns on shareholders' equity.

Cash Flow

The cash flow statement indicates a positive Free Cash Flow trend, although the growth rate has fluctuated. The Operating Cash Flow to Net Income ratio is robust, suggesting strong cash generation relative to earnings. However, the Free Cash Flow to Net Income ratio indicates some variability in free cash flow conversion.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
3.96B	3.84B	3.95B	4.01B	3.46B	3.33B
	Gross Profit
1.85B	1.78B	1.71B	1.67B	1.48B	1.40B
	EBIT
545.80M	553.30M	473.40M	509.70M	427.60M	353.90M
	EBITDA
620.90M	665.00M	588.50M	603.20M	520.50M	479.30M
	Net Income Common Stockholders
417.00M	422.60M	346.00M	384.00M	306.30M	248.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
397.90M	845.80M	397.90M	223.20M	491.30M	560.70M
	Total Assets
4.58B	3.81B	3.41B	3.48B	3.58B	3.49B
	Total Debt
1.19B	573.50M	495.60M	513.00M	494.30M	401.10M
	Net Debt
794.20M	-272.30M	97.70M	289.80M	3.00M	-159.60M
	Total Liabilities
2.06B	1.44B	1.39B	1.57B	1.53B	1.36B
	Stockholders Equity
2.52B	2.38B	2.02B	1.91B	2.04B	2.13B
Cash Flow		Free Cash Flow
454.60M	555.20M	511.40M	259.80M	364.90M	449.90M
	Operating Cash Flow
518.20M	619.20M	578.10M	316.30M	408.70M	504.80M
	Investing Cash Flow
-1.22B	―	-90.70M	-62.20M	-117.90M	-359.80M
	Financing Cash Flow
534.20M	-104.50M	-312.90M	-512.40M	-362.60M	-50.30M

Acuity Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 239.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 239.76 is below the 20-day moving average (MA) of 256.80, below the 50-day MA of 284.52, and below the 200-day MA of 284.55, indicating a bearish trend. The MACD of -8.90 indicates Negative momentum. The RSI at 36.62 is Neutral, neither overbought nor oversold. The STOCH value of 24.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AYI.

Acuity Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENS	72 Outperform	$3.39B	10.64	18.36%	1.10%	-2.94%	22.32%
AYI	71 Outperform	$7.23B	17.72	17.86%	0.27%	2.78%	11.53%
POWL	70 Outperform	$2.09B	13.14	37.22%	0.61%	38.27%	105.52%
AEIS	66 Neutral	$3.61B	66.73	4.80%	0.46%	-10.49%	-57.78%
NVT	66 Neutral	$8.54B	26.30	8.73%	1.48%	0.78%	-41.54%
ATKR	62 Neutral	$2.05B	5.76	25.00%	2.26%	-12.01%	-38.33%
Sector *	62 Neutral	$7.50B	12.89	3.19%	3.38%	3.64%	-14.27%

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.

Acuity Brands Announces Retirement of HR Chief

On February 10, 2025, Dianne S. Mills, Senior Vice President and Chief Human Resources Officer of Acuity Brands, notified the company of her intent to retire from her role effective December 31, 2025. Post-retirement, Mills is expected to serve as a strategic advisor, although no compensation arrangements have been finalized. This transition could impact the company’s human resources operations and strategic planning.