Examining Acuity Brands, Inc.’s (NYSE:AYI) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess AYI’s latest performance announced on 30 November 2019 and weight these figures against its longer term trend and industry movements.
How Well Did AYI Perform?
AYI’s trailing twelve-month earnings (from 30 November 2019) of US$308m has declined by -14% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 10%, indicating the rate at which AYI is growing has slowed down. Why is this? Well, let’s look at what’s transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Acuity Brands has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 10% exceeds the US Electrical industry of 6.8%, indicating Acuity Brands has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Acuity Brands’s debt level, has declined over the past 3 years from 22% to 16%.
What does this mean?
Though Acuity Brands’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research Acuity Brands to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AYI’s future growth? Take a look at our free research report of analyst consensus for AYI’s outlook.
- Financial Health: Are AYI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 November 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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