Why Acuity Brands Shares Are Soaring This Week

Starting in October on an auspicious note, shares of Acuity trademarks (YES 1.97%) run out the gate to start the new month. The lighting and building management solutions provider reported strong financial results for the fourth quarter of 2024 on Tuesday, leading investors to think it’s a good idea to click the buy button.

According to data provided by S&P Global Market Intelligence, shares of Acuity Brands climbed 10.4% from the end of trading last week to the end of the trading session on Thursday.

What sparked investors’ enthusiasm?

Beating 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 August 31. Analysts expected the company to report sales of $1.02 billion and EPS of $4.28. The cash flow situation also provided a pleasant surprise. Aided by a 7% year-over-year increase in operating cash flow in Q4 2024, Acuity Brands enjoyed a notable increase in free cash flow for the recently ended fiscal year: $555.2 million, compared to $511, $4 million for fiscal year 2023.

Investors also found inspiration in management’s encouraging outlook for 2025. In addition to projecting $3.9 billion to $4.1 billion in net sales, Acuity Brands forecast 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 expected continued growth in 2025, it’s no surprise that Acuity Brands stock is up this week. With the stock now trading at 16.6 times operating cash flow — a premium to its five-year average of 12.1 — it might be wise to wait for a pullback before buying the stock.