LSI Industries maintains stock target with Buy rating post-earnings By Investing.com

On Thursday, LSI Industries (NASDAQ:LYTS) received a reiterated Buy rating and a $20.00 stock price target from H.C. Wainwright following the company’s financial results for the fourth fiscal quarter of 2024. The firm’s performance showcased a year-over-year revenue increase of 4.3% to $129.0 million, which also marked a 19.2% rise from the previous quarter. This revenue figure surpassed the analyst’s expectations of $127.3 million.

The company’s gross margins for the quarter were reported at 26.2%, a decrease from the 28.8% observed in the third fiscal quarter of 2024 and the 29.0% in the same quarter of the previous year. Operating expenses saw a marginal increase to $24.8 million, up from $23.6 million in the preceding quarter, influenced by around $1.0 million in costs related to acquisitions.

LSI Industries posted a net profit of $5.7 million, or $0.19 per share, for the fourth fiscal quarter, which was a decline from the $8.4 million, or $0.28 per share, recorded in the fourth quarter of the fiscal year 2023. At the quarter’s close, the company’s balance sheet showed $4.1 million in cash and a debt load of $54.2 million. When including its credit facility, LSI Industries had approximately $50 million in cash availability.

The analyst’s reiteration of the Buy rating and the $20 price target reflects the company’s latest financial achievements and market position.

In other recent news, LSI Industries reported a 4% increase in fourth-quarter sales and an 11% rise in full-year adjusted EBITDA, indicating robust performance and growth. This growth is attributed to the successful acquisition of EMI Industries and the launch of over 25 new products, which have broadened its market offerings. Notably, the Lighting segment and Display Solutions Group saw significant sales growth, with the latter experiencing a 22% increase in the fourth quarter.

These developments were highlighted by CEO James Clark of Hallum Capital Group, who expressed a positive outlook for the company’s ventures in the C-store refueling market and the R290 business. Clark also revealed plans for a new lighting product line, Velocity, and anticipated growth in the grocery vertical.

LSI Industries is looking forward to continued growth in 2025, focusing on operational execution and margin management. The company is confident in its financial health and its ability to meet future demand through operational efficiency and capacity expansion. Despite potential minimal impact on SG&A costs due to investments to accelerate progress, the company maintains a strong balance sheet and a disciplined approach to cash management.

In the recent earnings call, Clark expressed optimism about increased order rates in the first quarter and outlined a well-thought-out plan to settle the debt incurred for EMI. With a robust pipeline of multi-year projects and a strong M&A strategy, these are the recent developments that indicate LSI Industries is well-positioned for continued success.

InvestingPro Insights

LSI Industries (NASDAQ:LYTS) continues to draw attention with its solid financial footing and market performance. According to InvestingPro data, the company has a market capitalization of $419.41 million and is trading with a P/E ratio of 17.8, which is considered low relative to its near-term earnings growth. This aligns with the InvestingPro Tip highlighting the company’s trading position at a low P/E ratio, suggesting that it may be undervalued based on its earnings outlook.

Another InvestingPro Tip worth noting is that LSI Industries has maintained dividend payments for 37 consecutive years, with a current dividend yield of 1.34%. This consistent dividend history can be particularly appealing to income-focused investors. Moreover, the company’s liquid assets exceed its short-term obligations, indicating a healthy liquidity position that can instill confidence in stakeholders regarding the company’s ability to meet its immediate financial commitments.

For investors seeking a deeper analysis and more detailed insights, InvestingPro offers additional tips on LSI Industries. With a total of 8 InvestingPro Tips available, interested parties can explore further at https://www.investing.com/pro/LYTS to gain a comprehensive understanding of the company’s financial health and market potential.

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