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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#1306
Positioning
Market Dominance
Manufacturing
Electrical Equipment
$720M
James A. Clark
LSI Industries Inc. manufactures and sells non-residential lighting and retail display solutions in the United States, Canada, Mexico, Australia, and Latin America. It operates in two segments, Lighting and Display Solutions. The Display Solutions segment implements, installs, and provides program management services.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = LYTS ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$LYTS LSI INDUSTRIES INC | 55 | 64 | 63 | 51 | 29.6x | 20.6x | 9.3% | 5.8% | 24.9% | 5.9% | 3.9% | 6.5% | 0.9% | 11.0x | $720M | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
LSI INDUSTRIES INC (LYTS) receives a "Hold" rating with a composite score of 54.7/100. It ranks #1306 out of 7,333 stocks in our coverage universe and carries a 3-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
James A. Clark
Chief Executive Officer
Labor Force
1,530
64
29
65
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for LYTS
In-line with peers — no strong momentum signal
Trading at a discount to fundamentals — favorable entry valuation
High profitability & efficiency — strong quality floor supports entry
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for LYTS.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 64 | 66 | -2NEUTRAL |
| MOMENTUM | 51 | 38 | +13ALPHA |
| VALUATION | 63 | 50 | +13ALPHA |
| INVESTMENT | 29 | 32 | -3NEUTRAL |
| STABILITY | 65 | 56 | +9ALPHA |
| SHORT INT | 46 | 41 | +5NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy 9.3% (sector -2.5%)
GM 25% vs sector 43%, OM 6% vs sector 1%
Capital turnover N/A
Rev growth 6%, 11yr history
Interest coverage 15.5x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our model assigns LSI INDUSTRIES INC a Hold rating, with a composite score of 54.7/100 and 3 out of 5 stars. Ranked #1306 of 7,333 stocks, LYTS presents a mixed quantitative picture — neither compelling enough to initiate new positions nor weak enough to warrant selling. Investors already holding may consider maintaining their position while monitoring for changes in the factor profile.
With a quality score of 64/100, LYTS shows adequate but unremarkable business quality. The company reports a return on equity of 9.3% (sector avg: -2.5%), gross margins of 24.9% (sector avg: 42.5%), net margins of 3.9% (sector avg: -0.2%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
LYTS's value score of 63/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 29.56x, an EV/EBITDA of 20.62x, a P/B ratio of 2.76x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
LSI INDUSTRIES INC's investment score of 29/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 6.5% vs. a sector average of 5.9% and a return on assets of 5.8% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
LYTS demonstrates moderate momentum with a score of 51/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 6.5% year-over-year, while a beta of 1.09 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
LYTS shows good financial stability with a score of 65/100. Key stability metrics include a beta of 1.09 and a debt-to-equity ratio of 11.00x (sector avg: 0.2x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 46/100 for LYTS suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 11.00x), small-cap liquidity risk. With a $720M market cap (small-cap), LSI INDUSTRIES INC may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
LYTS offers a modest dividend yield of 0.9%. While the income contribution is relatively small, even a small dividend signals management's commitment to shareholder returns and can serve as a signal of financial discipline.
LSI INDUSTRIES INC is a small-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #1306 of 7,333 overall (82nd percentile). Key comparisons include ROE of 9.3% exceeding the -2.5% sector median and operating margins of 5.9% above the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While LYTS currently exhibits a HOLD profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Investment (29) is the limiting factor — improvement here would lift the composite score most.
EV/EBITDA 80% ABOVE SECTOR MEDIAN
ROE 476% BELOW SECTOR MEDIAN
Gross Margin 41% BELOW SECTOR MEDIAN
AUDIT DATA AS OF DEC 31, 2025 (Q3 FY2025)
We rate LSI INDUSTRIES INC (LYTS) as a Hold with a composite score of 54.7/100 at a current price of $21.96. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.
The rating is primarily driven by strength in stability (65th percentile) and quality (64th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (29th percentile) and momentum (51th percentile) tempers our overall conviction. We assign a Narrow Moat rating (46/100), Low uncertainty, and Standard capital allocation.
Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
LSI INDUSTRIES INC holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 54.7/100 places it at rank #1306 in our full 7,333-stock universe. At $720M in market capitalization, LSI INDUSTRIES INC is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue is growing at 6%, though momentum at the 51th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.
The margin cascade tells an important story: gross margins of 25% (-17.6pp vs sector) narrow to operating margins of 6% (+4.6pp vs sector) and net margins of 3.9%, yielding a gross-to-net conversion rate of 16%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.
At a current price of $21.96, LSI INDUSTRIES INC is trading near fair value based on current fundamentals. Our value factor score of 63/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 29.6x (a 33% premium to the sector median of 22.3x), EV/EBITDA of 20.6x (at a premium), P/B of 2.8x, P/S of 1.2x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.
A conservative balance sheet (11% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
Even high-quality stocks face risks from valuation compression, competitive disruption, or macro shocks that are difficult to quantify in advance.
We assign a Low uncertainty rating to LSI INDUSTRIES INC. The company exhibits strong financial stability with a beta of 1.09, conservative leverage (11% D/E), and a stability factor in the 65th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
We identify no major risk factors at this time. The company's stability factor sits at the 65th percentile with quality at the 64th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.
Key risk mitigants include: conservative leverage (11% D/E) limits balance sheet risk; above-average stability (65th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate LSI INDUSTRIES INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 9.3%, and the balance sheet is managed within acceptable parameters (D/E: 11%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; LSI INDUSTRIES INC falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 0.85% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, LSI INDUSTRIES INC receives a Hold rating with a composite score of 54.7/100 (rank #1306 of 7,333). Our quantitative framework assigns a Narrow Moat (46/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 54/100.
Our analysis supports a neutral stance on LSI INDUSTRIES INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign LSI INDUSTRIES INC a Narrow Moat rating with a composite moat score of 46/100. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that LSI INDUSTRIES INC can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being financial resilience at 18.2/20.
The strongest moat sources are financial resilience (18.2/20) and growth durability (12.9/20). Interest coverage 15.5x. Rev growth 6%, 11yr history. These pillars form the core of LSI INDUSTRIES INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and economic value creation (4.1/20). Capital turnover N/A. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect LSI INDUSTRIES INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include moderate revenue growth of 6%. The margin cascade from 25% gross to 6% operating to 3.9% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that the profit engine is high-quality and likely sustainable, with the quality factor at the 64th percentile.
The margin profile shows gross margins of 25%, operating margins of 6%, net margins of 3.9%. Return metrics include ROE of 9.3% and ROA of 5.8%. Relative to the Manufacturing sector, gross margins are 17.6 percentage points below the sector median of 43%, and ROE of 9.3% compares to a sector median of -2.5%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 11%, a dividend yield of 0.85%, revenue growth of 6%. The sector median D/E is 0%, putting LSI INDUSTRIES INC at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
The board of LSI Industries Inc. ( NASDAQ:LYTS ) has announced that it will pay a dividend of $0.05 per share on the...
Operator: Greetings, and welcome to the LSI Industries Inc. Fiscal 2026 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode.
LSI Industries stock surged 14.08% after reporting fiscal 2026 second-quarter results. Despite a slight decline in net sales to $147 million, the company exceeded earnings expectations with adjusted net income of $0.26 per share versus estimates of $0.22. Strong cash flow generation of $23.3 million enabled debt reduction and balance sheet strengthening. Management expects continued revenue growth in the lighting segment and resumption of growth in display solutions in the second half of fiscal 2026.
LSI Industries' (LYTS) second-quarter fiscal 2024 results benefit from organic growth and new product innovation.
Since February 2021, the S&P 500 has delivered a total return of 76.3%. But one standout stock has nearly doubled the market - over the past five years, LSI has surged 135% to $22.47 per share. Its momentum hasn’t stopped as it’s also gained 15.5% in the last six months thanks to its solid quarterly results, beating the S&P by 7.9%.