Acuity Brands, Inc. (AYI)
Valuation Overview•Is Acuity Brands, Inc. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Moderate quality score of 67/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though profitability presents a headwind.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
AYI demonstrates strong business quality with robust profitability and healthy margins. This is supported by a highly conservative balance sheet featuring strong liquidity and pristine Altman Z safety.
The company exhibits steady, low-single-digit revenue growth paired with stable bottom-line earnings. Operating efficiency remains adequate with margins around 13.0%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.1B | +13.1% | +2.7% | +5.5% | +4.8% | |
| EBITDA | $198.7M | — | +6.3% | — | — | |
| Net Income | $120.5M | -6.2% | +1.1% | — | +6.0% | |
| EPS (Diluted) | $3.82 | -6.8% | +4.2% | +14.9% | +9.4% | |
| Free Cash Flow | $114.8M | -4.0% | +27.1% | +3.4% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 48.1% | 45.9% | 44.4% | 43.1% |
| Operating Margin | 13.0% | 13.3% | 13.0% | 13.0% |
| Net Margin | 9.0% | 9.6% | 9.5% | 9.1% |
| FCF Margin | 11.8% | 13.2% | 11.3% | 10.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $4.00 | $4.14 | +3.5% | ||
| Q1'26 | $4.52 | $4.69 | +3.8% | ||
| Q4'25 | $4.83 | $5.20 | +7.7% | ||
| Q2'25 | $4.44 | $5.12 | +15.3% | ||
| Q2'25 | $3.69 | $3.73 | +1.1% | ||
| Q1'25 | $3.87 | $3.97 | +2.6% | ||
| Q4'24 | $4.28 | $4.30 | +0.5% | ||
| Q2'24 | $4.07 | $4.15 | +2.0% |
Total return is +14.6% (1Y), lagging the benchmark by -10.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -14.9% | -24.2% | — |
| 1Y | +14.6% | -10.4% | +0.3% |
| 3YCAGR | +24.7% | +3.6% | +1.2% |
| 5YCAGR | +12.4% | -1.3% | +1.7% |
| 10YCAGR | +2.6% | -11.2% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Acuity Brands, Inc. (AYI) valuation, health, and returns.
Acuity Brands, Inc. is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. trading near fair value (DCF: $268.34)
Acuity Brands, Inc. has multiple valuation anchors: DCF Intrinsic Value: $268.34 | Peer Relative Fair Value: $453.55 | Wall Street Analyst Target: $392.50 (implying +23.7% upside). A convergence of these signals offers higher conviction.
Acuity Brands, Inc. displays good financial health with a composite quality score of 67/100, supported by a Altman Z-Score of 5.4 (safe zone), Piotroski F-Score of 4/9, Return on Invested Capital (ROIC) of 16.4%.
Acuity Brands, Inc. pays a 0.2% dividend yield, covered by a 5% payout ratio with 2 years of growth, supplemented by a 1.2% buyback yield.
Acuity Brands, Inc.'s current growth trajectory is Accelerating. The company achieved +13.1% 1Y revenue growth and -6.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +2.7%.
Wall Street consensus is Hold based on 33 analysts, beating EPS expectations in 100% of recent quarters with a 24-quarter streak. The consensus price target represents a +23.7% change from current levels.
Investment risks for Acuity Brands, Inc. include: -31.6% 1-year max drawdown, high beta (1.42x market volatility). Volatility risk is characterized by a beta of 1.42x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.