LSI trades at $19.09 per share and has stayed right on track with the overall market, gaining 7.4% over the last six months. At the same time, the S&P 500 has returned 10.5%.

Is now a good time to buy LYTS? Find out in our full research report, it’s free.

Why Does LSI Spark Debate?

Enhancing commercial environments, LSI (NASDAQ: LYTS) provides lighting and display solutions for businesses and retailers.

Two Things to Like:

1. Skyrocketing Revenue Shows Strong Momentum

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, LSI’s 15.6% annualized revenue growth over the last five years was incredible. Its growth surpassed the average industrials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

LSI’s EPS grew at an astounding 50.7% compounded annual growth rate over the last five years, higher than its 15.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

One Reason to be Careful:

Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect LSI’s revenue to rise by 2.2%, a deceleration versus its 15.6% annualized growth for the past five years. This projection is underwhelming and implies its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

Final Judgment

LSI’s positive characteristics outweigh the negatives, but at $19.09 per share (or 15.2× forward P/E), is now the time to initiate a position? See for yourself in our full research report, it’s free.

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