Acuity Brands Offers Good Value

Summary:

  • Product vitality initiatives are helping Acuity Brands to increase prices to offset cost inflation, which should improve the revenue growth rate as well as support its margins.
  • AYI’s backlog is running higher than usual due to industry-wide supply chain issues over the last few quarters.
  • As these supply chain constraints ease, this high backlog value should support revenue growth.
  • AYI is also establishing new supplier relationships and deepening existing ones to procure certain components and engineering its products to utilize available components to deal with supply chain inefficiency.

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Investment Thesis

Acuity Brands, Inc. (NYSE:AYI) recorded healthy sales volume and pricing growth in its last quarter, which helped it post double-digit revenue growth in the quarter. While there are concerns regarding macroeconomic slowdown, the company’s higher-than-usual backlog, easing supply chain, investment in


Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


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