LSI Industries (LYTS) Stock Forecast & Price Target

LSI Industries Inc. reported sales of approximately $155.1 million for F4Q25, exceeding estimates and reflecting a sequential growth of 17.1%, primarily driven by improved demand in both its Lighting and Display Solutions markets. The company benefited significantly from recent acquisitions, with EMI contributing about $22.8 million and Canada's Best Holdings adding around $7.2 million to its top-line performance in the quarter. Furthermore, total orders increased by 11% year-over-year, with a notable 23% rise in sales within the fueling/convenience store vertical, positioning LSI for sustained momentum and growth into fiscal 2026.

LSI Industries Inc has reported adjusted gross margins of approximately 26.1%, exceeding earlier estimates, and an adjusted EBITDA margin of about 9.6%, which also surpassed projections. Despite a positive cash flow generation of around $34.7 million in F4Q25, the company's outstanding debt remains at a considerable level of approximately $45.1 million, contributing to a modest decrease in the net leverage ratio to 0.8x. The expectation that tariffs will not significantly impact lighting margins in the near term does not mitigate concerns regarding overall financial performance and debt management, leading to a negative outlook on the stock.