LSI Industries, Inc.
LSI Industries, Inc. (NASDAQ: LYTS) is a manufacturer of non-residential lighting and display solutions. It operates in two segments: 1) Lighting, which manufactures and assembles both conventional and LED light sources for outdoor and indoor lighting solutions, as well as electronic circuit boards, assemblies, and sub-assemblies for retail and other commercial facilities; and 2) Display Solution, which develops and sells digital visual image elements for commercial organizations such as interior branding, electrical and architectural signage, and other electrical board systems. As of January 27, 2022, the company’s market capitalization stood at USD 161.52 million.
Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
LYTS Daily Technical Chart (Source: REFINITIV)
LYTS's stock price decreased 28.22% in the past twelve months and is currently trading close to lower-band of its 52-week range of USD 5.96 to USD 10.58. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 62.39. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 6.28.
Considering the sharp correction in the stock price, stiff competitive environment, current valuation, and technical indicators, we believe the decent business fundamentals are adequately reflected at current trading levels. Hence, we recommend a "Sell" rating on the stock at the closing price of USD 7.07, up 17.83%, as of January 27, 2022.
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.