Acuity brands (NYSE:) has to be loved.

Despite growing obstacles in the field, lighting and construction system manufacturer delivered victory. Since Bible times, the story of the underdog victorious has been a part of our lives. It’s always rewarding to hear it again.

Acuity’s David and Goliath tale ended in the exact same manner when it released its earnings report. This is why I believe Acuity deserves my support. TipRanks shows Acuity stock charts.

Quarterly earnings for the company were $3.27 per share. Wall Street consensus expectations were for $2.85; Zacks consensus expected $2.89.

In terms of revenue, the company beat all estimates. Acuity reported net sales of $992.7 millions for the fourth quarter 2021. This was an 11.4% increase over the prior year.

Also, the full-year results of Acuity were solid. Acuity reported an operating profit of $427.6 Million for the entire year. This was up 20% compared to last year.

Wall Street Take

Acuity is a Moderate Buy according to Wall Street consensus. Two analysts who have provided 12-month price targets to Acuity within the last three month are both claiming that the company is a Buy.

Average Acuity target price is $212.50. This represents an 8.3% upside potential.

How can construction be improved?

It is clear that 2020 will be a good year for all kinds of construction. Large-scale construction was a result of people staying at home and renovations. Throw in a disturbed geopolitical situation — complete with regular riots in the summer of 2020 — and people started looking to depart the cities and go more rural.

Many companies involved in construction or home supply were impacted by this. There is still an active housing boom. A house in Boston was put on the market just five days ago for $399,000. It had been recently damaged in a fire.

A house in Colorado Springs was put up for sale earlier this summer. It went on the open market for $590,000. This house had been vandalized extensively inside. One agent noted that the smell inside the house — a combination of dead animals and rotting food — was sufficiently bad that those inside could “feel” it. After just one week of being on the market, it sold for $580,000.

It’s an incredible boom. It’s no surprise that Acuity saw such impressive results. We are also aware of its struggles.

All things are getting more costly. There is a veritable army of cargo vessels anchored off Los Angeles. Companies are desperate for workers to the extent that Wendy’s (NASDAQ) offers free college to all new employees.

Conclusion Views

An organization that turns in high numbers in good times does not merit attention. It is worthwhile to watch a company making big profits in difficult circumstances.

Acuity Brands is likely to have benefited from this construction boom. However, its inability to adapt to the booming market is limited by rising input costs. The gold rush is on but everybody has a broken shovel.

Acuity brands is my bullish stock. At least, for the time being. Acuity’s gains may be lost when the boom in construction is over.

It is, however, in a good position at the moment to provide material for all of that new construction. That should be encouraging news. The company has also demonstrated its capability to keep up with the times. It has a competitive advantage in the future, even though construction booms will eventually slow.

Disclosure: Steve Anderson didn’t hold any positions in the securities listed in this article at the time it was published.

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