Home Stock Is it time to buy Acuity Brands after delivering solid fiscal Q4 results?

Is it time to buy Acuity Brands after delivering solid fiscal Q4 results?


On Wednesday, Acuity Brands Inc. (NYSE:AYI) shares soared more than 12% after announcing its most recent quarterly results. The company reported its fiscal Q4 revenue and earnings before markets opened, beating analyst expectations.

The company posted FQ4 non-GAAP earnings per share of $3.27, beating the consensus Street estimate by $0.40. Moreover, its GAAP EPS of $2.72 also outperformed the average analyst expectation of $2.57, while revenue for the quarter grew by 11.4% to $992.7 million, $34.45 million ahead of estimates.

Is there time left to buy AYI shares?

From an investment perspective, Acuity Brands shares trade at an exciting forward P/E ratio of about 18.74. Therefore, investors could still find the stock as a compelling option despite Wednesday’s post-earnings spike.

In addition, analysts expect the company to experience annual bottom-line growth of about 12.93% over the next five years, thereby appealing to growth investors.

Therefore, although Acuity Brands shares are up nearly 65% this year and more than 80% over the last 12 months, the stock seems to be an exciting growth opportunity for long-term investors.

Source – TradingView

Should you wait for a pullback?

Technically, Acuity Brands appears to be trading within a gently descending channel formation in the intraday chart. However, Wednesday’s sharp spike initiated an upward channel breakout, pushing the stock to overbought conditions.

Therefore, it seems a pullback is inevitable as investors prepare to take some profits. They could target potential pullbacks at approximately $186.45 or lower at $174.47. However, if the bull run continues, the stock could find resistance at $208.48 or higher at $220.14.

A pullback presents a better opportunity

In summary, although Acuity Brands shares continue to enjoy solid bullish momentum, the stock has surged to the overbought conditions of the 14-day RSI, creating an opportunity for a pullback.

Moreover, whilst its forward P/E of 18.74 looks exciting, its trailing 12-month P/E of about 26.19 is less attractive. As a result, waiting for the price to retest the current support levels creates a more compelling opportunity.

The post Is it time to buy Acuity Brands after delivering solid fiscal Q4 results? appeared first on Invezz.

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