Investors: Is Acuity Brands Worth the Risk?
November 10, 2023
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Investors have been wondering if Acuity Brands ($NYSE:AYI) Inc. is worth the risk. Acuity Brands is a leading provider of lighting products, control systems, and related services in North America. Their portfolio of products and services are designed to enhance the way people experience their indoor and outdoor spaces. With a market capitalization of over $9 billion, Acuity Brands is one of the largest players in the lighting industry. But what risks are associated with investing in Acuity Brands? Acuity Brands stock price has been relatively volatile over the past few years, due to uncertainty surrounding the demand for its products and services.
Additionally, the company has faced increasing competition from other lighting companies who are offering more innovative products. Furthermore, the company has been investing heavily in research and development to stay ahead of its competitors. This could potentially lead to higher costs for the company’s products and services. Overall, investors must weigh the potential risks associated with Acuity Brands against the potential rewards. If investors are willing to take on some risk and have confidence in Acuity Brands’s strategy, then investing in Acuity Brands might be worth considering.
Price History
For investors looking for short-term gains, Acuity Brands may not be the best option. On Monday, Acuity Brands’ stock opened at $169.8 and closed at $169.0, down by 0.9% from its previous closing price of $170.6. This indicates that the stock may not be a particularly lucrative investment in the short-term.
However, despite this recent dip in stock price, it may still be worth investing in Acuity Brands. The company has a strong track record of success and has demonstrated its capacity to weather the storm of economic downturns.
In addition, its innovative products, such as intelligent lighting controls and energy efficient lighting systems, are likely to remain in demand in the future. Ultimately, investors need to consider whether Acuity Brands is a good fit for their portfolios and risk profiles. A long-term investment in Acuity Brands could potentially yield significant returns, while a short-term investment may not have the same potential for success. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Acuity Brands. More…
| Total Revenues | Net Income | Net Margin |
| 3.95k | 346 | 9.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Acuity Brands. More…
| Operations | Investing | Financing |
| 578.1 | -90.7 | -312.9 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Acuity Brands. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.41k | 1.39k | 63.15 |
Key Ratios Snapshot
Some of the financial key ratios for Acuity Brands are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 5.9% | 10.2% | 11.8% |
| FCF Margin | ROE | ROA |
| 12.9% | 14.8% | 8.5% |
Analysis
At GoodWhale, we conducted an analysis of ACUITY BRANDS‘ financials. Based on our Star Chart, ACUITY BRANDS has a very high health score of 9/10 with regards to its cashflows and debt. This score indicates that ACUITY BRANDS is capable of safely riding out any crisis without the risk of bankruptcy. Further, ACUITY BRANDS is strong in dividend, profitability, and medium in asset and growth. We classify ACUITY BRANDS as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. For investors looking for companies with solid dividend returns, reliable profitability, and moderate asset and growth metrics, ACUITY BRANDS is an excellent option to consider. More…
Peers
The competition in the lighting industry is fierce, with Acuity Brands Inc being one of the most prominent competitors. It is up against a range of other players such as Hengdian Group Tospo Lighting Co Ltd, Lena Lighting SA, and Dongguan Kingsun Optoelectronic Co Ltd. Each of these companies is vying for a share of the market with their own unique range of products and services. As such, they are all competing to be the top choice for customers looking to purchase lighting solutions.
– Hengdian Group Tospo Lighting Co Ltd ($SHSE:603303)
Hengdian Group Tospo Lighting Co Ltd is a Chinese lighting manufacturer and distributor that specializes in LED lighting products. As of 2022, the company has a market capitalization of 8.88 billion, indicating that it is a large and successful enterprise. Furthermore, the company has achieved a Return on Equity of 6.08%, which is an impressive figure for such a large company. This indicates that the company is able to efficiently and effectively use its resources to generate returns for its shareholders.
– Lena Lighting SA ($LTS:0O7K)
Lena Lighting SA is a leading provider of lighting solutions for commercial, industrial, and residential applications. The company designs, manufactures, and distributes LED and conventional lighting systems for a variety of purposes. As of 2022, Lena Lighting SA has a market cap of 95.27M and a Return on Equity of 8.26%. Its market cap is an indication of the company’s ability to generate profits from its investments and reflects the overall value of its stock in the market. Its ROE measures the efficiency of its management and financial performance, showing how well the company is doing in terms of generating returns on its investments.
– Dongguan Kingsun Optoelectronic Co Ltd ($SZSE:002638)
Dongguan Kingsun Optoelectronic Co Ltd is a Chinese based company that specializes in the design and manufacture of optoelectronic components for a variety of industries. The company has a market cap of 3.42B as of 2022, making it one of the larger companies in its sector. Despite having a relatively high market cap, the company has a Return on Equity of -15.89%, which is lower than many of its competitors. This suggests that the company may be struggling to turn a profit or is facing other issues that are affecting its performance.
Summary
Acuity Brands Inc. is a leading provider of innovative lighting and building management solutions for commercial, industrial, and residential applications. The company has a strong balance sheet with sufficient liquidity, has generated consistent sales growth over the past five years, and maintains a competitive advantage in the lighting market. Furthermore, Acuity’s overall financial performance is aided by its focus on innovation and technological advancement.
The company’s commitment to research and development, which accounts for a large portion of its operating expenses, keeps Acuity ahead of the competition. In summary, Acuity Brands appears to be a low-risk investment with potential for long-term growth.
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