Acuity Inc. (NYSE:AYI) will release earnings results for its first quarter before the opening bell on Thursday, Jan. 8, 2025.Analysts expect the Atlanta, Georgia-based company to report quarterly earnings at $4.59 per share, up from $3.97 per share in the year-ago period. The consensus estimate for Acuity's quarterly revenue is $1.14 billion, up from $951.6 million a year earlier, according to data from Benzinga Pro.On Oct. 1, the company reported fourth-quarter net sales growth of 17.1% year-over-year to $ ...

News over the weekend added a fresh dose of geopolitical uncertainty for investors to digest as the first full week of trading in 2026 gets underway. In the early-morning hours Saturday, the U.S. launched a military strike on Venezuela and extracted President Nicolás Maduro in order for him to face criminal charges in the U.S. President Donald Trump later said that the U.S. would "run" Venezuela until an orderly transition is possible, and that U.S. oil companies would rebuild the oil infrastructure of the ...

Core Viewpoint - Acuity (AYI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based solely on changes in a company's earnings picture, with the Zacks Consensus Estimate reflecting EPS estimates from sell-side analysts [1][2]. - A positive change in earnings estimates is strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4][6]. Company Performance and Investor Sentiment - The upgrade for Acuity suggests an improvement in the company's underlying business, which should encourage investors to drive the stock price higher [5]. - Over the past three months, the Zacks Consensus Estimate for Acuity has increased by 3%, with expected earnings of $19.76 per share for the fiscal year ending August 2026, unchanged from the previous year [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Acuity's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Viewpoint - Acuity Inc. is set to release its fiscal 2026 first-quarter results on January 8, 2026, with a conference call led by CEO Neil Ashe [1]. Company Overview - Acuity Inc. (NYSE: AYI) is a leading industrial technology company focused on solving problems related to spaces and lighting through innovative products and services [3]. - The company operates through two main segments: Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS) [3]. Growth Strategy - Acuity aims to achieve growth by developing innovative products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform [4]. - The company emphasizes customer outcomes to drive growth and productivity, aiming to increase market share and deliver superior returns [4]. - Acuity plans to aggressively deploy capital to expand its business and enter attractive new verticals [4]. Operational Footprint - Acuity Inc. is headquartered in Atlanta, Georgia, and has operations across North America, Europe, and Asia, supported by approximately 13,000 associates [5].

Core Insights - Futures are rising, indicating a positive market sentiment, with notable gains in stocks like Marvell and American Eagle [1] - Acuity Brands is highlighted for its strong technical performance, achieving a Composite Rating of 95 out of 99 and showing support at converged 21-day and 50-day lines [1] - The stock market is experiencing a rebound, with Nasdaq leading the way and key stocks such as Snowflake and Acuity Brands being closely monitored [1][2] Company Performance - Acuity Brands has cleared a technical benchmark, achieving an 80-plus Relative Strength (RS) Rating, indicating strong market performance [4] - The stock is approaching a key technical benchmark, with a flat base pattern emerging, which is considered a positive sign in technical analysis [1][4] - Acuity Brands is part of a group of stocks showing improving market leadership, earning an RS Rating of 82 [4] Market Trends - Small-cap stocks are experiencing significant gains, with Acuity Brands and others like ESLT and BX in focus as they race higher after a breakout [4] - The overall market is showing signs of recovery, with the Nasdaq leading the rebound and various stocks, including Acuity Brands, being highlighted for their performance [1][2]

Core Viewpoint - Acuity (AYI) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to significant price movements based on their buying or selling actions [3]. Business Improvement Indicators - The upgrade in Acuity's rating suggests an improvement in the company's underlying business, which is expected to drive the stock price higher as investors recognize this trend [4]. Importance of Earnings Estimate Revisions - Research indicates a strong correlation between earnings estimate revisions and stock movements, making it beneficial for investors to track these revisions [5]. - The Zacks Rank system utilizes four factors related to earnings estimates to classify stocks, with a proven track record of generating substantial returns for top-rated stocks [6]. Current Earnings Estimates for Acuity - Acuity is projected to earn $19.75 per share for the fiscal year ending August 2026, with no year-over-year change, but analysts have raised their estimates by 4% over the past three months [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of ratings, ensuring that only the top 20% of stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [8][9]. - Acuity's upgrade to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].

Core Insights - Investors in the Technology Services sector may consider Acuity (AYI) and SPX Technologies (SPXC) as potential value stocks [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] Valuation Metrics - AYI has a forward P/E ratio of 18.29, while SPXC has a forward P/E of 31.72, suggesting AYI may be more undervalued [5] - AYI's PEG ratio is 1.83, compared to SPXC's PEG ratio of 2.01, indicating AYI's expected earnings growth is more favorable relative to its valuation [5] - AYI's P/B ratio is 4.06, while SPXC's P/B ratio is 4.95, further supporting AYI's position as the superior value option [6] Value Grades - AYI has a Value grade of B, while SPXC has a Value grade of D, highlighting AYI's stronger valuation metrics [6]

Core Insights - Acuity Brands reported mixed Q4 fiscal 2025 results, with earnings exceeding estimates while revenues fell short, although both metrics improved year-over-year [2][4]. Financial Performance - Adjusted EPS was $5.20, surpassing the Zacks Consensus Estimate of $4.70 by 10.6%, and increased 21% from $4.30 in the prior year [4]. - Net sales reached $1.209 billion, missing the consensus mark of $1.212 billion by 0.3%, but showing a 17.1% increase from the previous year [4]. Segment Performance - The Acuity Brands Lighting segment saw a 0.8% increase in quarterly sales to $962.4 million, while the Independent Sales Network sales rose 3.7% to $702.4 million [5]. - Acuity Intelligent Spaces generated net sales of $255.2 million, a significant increase of 204.2% year-over-year, with adjusted operating profit rising 154% to $54.6 million [7]. Operating Highlights - Adjusted operating profit increased 26.2% year-over-year to $225.3 million, with an adjusted operating margin of 18.6%, up 130 basis points [8]. - Adjusted EBITDA rose 25.8% to $240.7 million, with an adjusted EBITDA margin expanding 140 basis points to 19.9% [8]. Financial Position - As of the end of Q4, cash and cash equivalents were $422.5 million, down from $845.8 million at the end of fiscal 2024, while long-term debt increased to $896.8 million from $496.2 million [10]. - For fiscal 2025, cash provided by operating activities totaled $601.4 million, down from $619.2 million in the prior year [10]. Shareholder Returns - The company repurchased nearly 0.44 million shares for $118.5 million and repaid $200 million of term-loan borrowings, while also increasing its quarterly dividend by 13% to 17 cents per share [11]. Future Guidance - For fiscal 2026, Acuity expects net sales between $4.7 billion and $4.9 billion, indicating growth from $3.84 billion in fiscal 2024, with adjusted EPS projected in the range of $19-$20.50 [12].

Competitive Risks - The company faces risks from aggressive pricing actions by competitors, which may affect revenue growth and profitability levels[33]. - The company competes in a rapidly evolving technological landscape, where new competitors may offer integrated solutions that challenge existing offerings[43]. - Relationships with channel partners are crucial, and the loss of significant partners could harm business operations[44]. Product and Innovation Risks - New product innovations may not yield desired returns, potentially leading to inventory write-downs and impacting overall business performance[34]. - The company has begun incorporating AI capabilities into its product offerings, which may pose risks related to accuracy, bias, and legal liability[69]. - Product recalls due to design or manufacturing issues could result in substantial costs, including lost sales and penalties[77][78]. Supply Chain and Operational Risks - Supply chain disruptions, particularly for components like microchips, have resulted in increased costs and may affect timely procurement of materials[39]. - The company relies on third-party relationships for various operations, which introduces risks related to product quality and operational interruptions[59]. - The company operates seven manufacturing facilities in Mexico, some of which hold Maquiladora status, allowing duty-free import of raw materials[62]. Geopolitical and Economic Risks - The company is exposed to geopolitical risks, with approximately 55% of finished products manufactured in Mexico, which could disrupt supply chains[45]. - Economic conditions, including potential recessions and rising commodity costs, may adversely affect cash flows and access to capital[38]. - The company is subject to various international regulations, including the USMCA, which affects a significant portion of its sales[63]. Labor and Workforce Risks - The company employed approximately 13,800 people as of August 31, 2025, with about 9,300 in international locations[56]. - Approximately 58% of the workforce is covered by union recognition and collective bargaining agreements, with 48% of these agreements set to expire within one year[56]. - The company faces intense competition for qualified personnel, which may impact its ability to attract and retain key employees amid rising labor costs and shortages[57]. Financial and Currency Risks - The company is exposed to foreign currency fluctuations, which could impact pricing competitiveness and overall financial performance[66]. - A hypothetical 10% depreciation of the Canadian dollar could negatively impact operating profit by approximately $3.0 million, while a 10% appreciation could favorably impact it by approximately $3.7 million[186]. - A 10% decrease in the value of the Mexican peso could favorably impact operating profit by approximately $23.0 million, whereas a 10% increase could negatively impact it by approximately $28.1 million[186]. - The company has a significant exposure to variable-rate debt, with $400.0 million borrowings outstanding on its credit facility[185]. Regulatory and Compliance Risks - The company is subject to a range of environmental regulations, including those related to greenhouse gas emissions, which may increase operational costs[71]. - The company may face challenges in complying with evolving ESG standards, which could affect its reputation and financial performance[74]. - The company is subject to evolving laws and regulations regarding ESG disclosures, which may increase operational costs and impact future financial conditions[75][84]. Legal and Reputational Risks - Legal claims arising from normal business operations may exceed insurance coverage, potentially leading to significant financial liabilities[76]. - The company may incur significant costs and reputational damage from security breaches affecting personal and proprietary information[52]. - The company may face reputational damage and adverse financial impacts if it fails to meet evolving stakeholder ESG expectations[84]. - Cybersecurity risks are increasing, with potential impacts on operations and financial reporting due to sophisticated cyber threats[49]. Climate and Sustainability Risks - The company faces risks related to climate change and sustainability, which may lead to increased operational costs and regulatory compliance burdens[81][82].

Core Insights - Acuity (AYI) is currently viewed as a more attractive investment option compared to Duolingo, Inc. (DUOL) for value investors seeking undervalued stocks [1] Valuation Metrics - AYI has a forward P/E ratio of 18.52, significantly lower than DUOL's forward P/E of 107.94, indicating that AYI is more reasonably priced relative to its earnings [5] - AYI's PEG ratio stands at 1.85, while DUOL's PEG ratio is higher at 2.25, suggesting AYI offers better value when considering expected earnings growth [5] - AYI's P/B ratio is 4.12, compared to DUOL's P/B of 15.98, further highlighting AYI's relative undervaluation [6] Earnings Outlook - AYI is experiencing an improving earnings outlook, which contributes to its strong Zacks Rank of 1 (Strong Buy), while DUOL holds a Zacks Rank of 2 (Buy) [3][7]