Between the company’s strong recent performance and its encouraging outlook, investors are excited about Acuity Brands stock.
Starting off October on an auspicious note, shares of Acuity Brands (AYI 1.92%) raced out of the gate to kick begin the new month. The lighting and building management solutions provider reported strong fiscal fourth-quarter 2024 financial results on Tuesday that led investors to believe that it was a bright idea to click the buy button.
According to data provided by S&P Global Market Intelligence, shares of Acuity Brands have climbed 10.4% from the end of trading last week to the end of Thursday’s trading session.
What lit up investors’ excitement?
Exceeding both top- and bottom-line expectations, Acuity Brands reported revenue and adjusted earnings per share (EPS) of $1.03 billion and $4.30, respectively, for the period ended Aug. 31. Analysts had expected the company would report sales of $1.02 billion and EPS of $4.28. The cash-flow statement also provided a pleasant surprise. Assisted by a 7% year-over-year increase in operating cash flow in Q4 2024, Acuity Brands enjoyed notable free-cash-flow growth for its recently completed fiscal year: $555.2 million compared to $511.4 million for fiscal 2023.
Investors also found inspiration in management’s encouraging outlook for 2025. In addition to projecting $3.9 billion to $4.1 billion for net sales, Acuity Brands forecasts adjusted diluted EPS of $16 to $17.50. For context, the company reported net sales of $3.8 billion and adjusted diluted EPS of $15.55 in fiscal 2023.
Is buying this smart building stock a smart idea right now?
After a strong performance in 2024 and continued growth expected in 2025, it’s unsurprising that Acuity Brands stock soared this week. With shares now trading at 16.6 times operating cash flow — a premium to their five-year average of 12.1 — it may be wise to wait for a pullback before buying the stock.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.