Acuity Inc. Common Stock (AYI)

FairStock Score: 61/100 — STEADY

Key Financials

Strengths

• Generates $430 million in annual free cash flow (4.9% yield on market cap)
• Solid return on equity of 16.0% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.28, providing financial flexibility
• Altman Z-Score of 5.0 confirms minimal bankruptcy risk and strong solvency
• Established organization with 13,800 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($169) with negative 73% margin of safety—limited downside protection

AI Analysis

Acuity Inc. Common Stock is a small-cap industrials company valued at $8.9 billion. The business generates $4.6 billion in annual revenue with a 2.1% net margin and $430 million in free cash flow. From a quality standpoint, Acuity shows Altman Z-Score of 5.0 confirms fortress-level solvency and adequate 16% ROE. On valuation, the stock is reasonably priced at 21.2x earnings, with trades above its Graham Number with a negative 73% margin. Growth dynamics show revenue growing at 4.9% and profit growth of 24.9%. Our composite FairStock Score of 61/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $430 million in annual free cash flow (4.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer