Why Acuity (AYI) Is a Convincing Buy in 2026 Based on Earnings Revisions and Zacks Insights

In the ever-evolving landscape of industrial technology stocks, Acuity Inc. (AYI) has emerged as a standout candidate for near-term investment. Recent developments, including a Zacks Rank upgrade to #2 (Buy), robust earnings estimate revisions, and institutional validation, position AYI as a compelling opportunity for investors seeking undervalued momentum stocks. This analysis delves into the data-driven rationale for why AYI warrants a place in 2026 portfolios.

Zacks Rank Upgrade and Earnings Revisions Signal Strong Momentum

Acuity's recent upgrade to a Zacks Rank #2 (Buy) underscores a significant shift in analyst sentiment. This ranking places AYI in the top 20% of Zacks-covered stocks in terms of earnings estimate revisions, a critical indicator of near-term stock price potential. The upgrade is driven by a 12.3% upward revision in earnings estimates over the past 90 days, with the Zacks Consensus Estimate for fiscal 2026 now at $19.76 per share. Such revisions reflect confidence in Acuity's ability to outperform expectations, particularly in its lighting and intelligent spaces segments, which reported 22% year-over-year revenue growth in Q3 2025.

The company's Growth Style Score of B further reinforces its appeal, highlighting a strong forecast for year-over-year earnings growth. This score, combined with the Zacks Rank upgrade, suggests that AYI is not only adapting to market dynamics but also capitalizing on them. Analysts project a 12-month stock price target of $395.17, implying an 8.93% upside from the current price of approximately $369.

Institutional Buying Validates Investor Confidence

Institutional ownership trends provide additional validation for AYI's investment thesis. As of late 2025, several major institutions have increased their stakes in Acuity, including Orion Portfolio Solutions LLC (52.1% increase) and Durable Capital Partners LP (13.8% increase) according to market data. Conversely, Neuberger Berman Group LLC reduced its holdings by 14.4%, but State Street Corp's 3.098% ownership underscores the stock's enduring institutional appeal as reported by market sources. These movements indicate a dynamic shift in sentiment, with growth-focused investors prioritizing AYI's innovative positioning in the industrial technology sector.

The institutional validation is further supported by Acuity's market capitalization of $10.71B and a 9.1% profit margin, reflecting operational efficiency and scalability. With a trailing twelve-month revenue of $4.35B, AYI is demonstrating the financial resilience needed to sustain its growth trajectory as per financial analysis.

Valuation Metrics Suggest Undervaluation Amid Momentum

While Acuity's P/E ratio of 27.9x appears elevated, a deeper analysis reveals a more nuanced picture. The company's PEG ratio of 1.95 as of 2026 suggests overvaluation at first glance according to market analysis. However, this metric must be contextualized against AYI's strong earnings growth and intrinsic value estimates. Recent discounted cash flow (DCF) models project an intrinsic value ranging from $233.20 to $371.95 per share as calculated by valuation experts, with the current price of $369.08 as reported by market data hovering near the upper end of this range. This implies that the market has already priced in a significant portion of AYI's growth potential, but not all of it.

Moreover, Acuity's enterprise value to EBITDA ratio of 17.49 (as of August 2025) compares favorably to industry peers, indicating relative value despite the stock's momentum-driven price action. Analysts also note that AYI's P/E ratio of 28x is still below its fair value benchmark of 25x, a discrepancy that could narrow as earnings estimates continue to rise.

Conclusion: A Strategic Buy for 2026

Acuity's Zacks Rank upgrade, coupled with institutional buying and favorable valuation metrics, presents a compelling case for near-term investment. The stock's earnings revisions and Growth Style Score of B highlight its potential to outperform in 2026, while institutional validation reinforces its credibility as a momentum play. Although the PEG ratio suggests caution, the intrinsic value estimates and earnings growth trajectory indicate that AYI remains undervalued relative to its long-term potential. For investors seeking exposure to the industrial technology sector, Acuity offers a rare combination of momentum, institutional support, and growth-oriented fundamentals.