Market Insider

Acuity Brands shares tank after earnings, sales miss

Acuity Brands
Luke Sharrett | Bloomberg | Getty Images

Shares of Acuity Brands plunged nearly 15 percent on Monday after the lighting solutions provider reported weaker-than-expected quarterly results.

Vernon Nagel, CEO at Acuity Brands, said in a statement that the firm expects a weak fiscal second quarter, noting that it is "typically our weakest quarter." He also said, however, long-term fundamental drivers of the markets we serve still seem to be intact and positive, while independent third-party forecasts and leading indicators continue to suggest positive growth rates for our fiscal 2017."

"Therefore, we have not meaningfully changed our previous expectations that the fiscal 2017 growth rate for lighting and energy management solutions in the North American market, which includes renovation and retrofit activity, will be in the mid-to-upper single digit range," Nagel said.

That said, Joseph Osha, an analyst at JMP Securities, does not think Acuity Brands fell because of its quarterly results. "The stock is down so much today because it's overvalued," he told CNBC.

"If you look at what the company has achieved [compared to a year ago], they're doing OK," Osha said. "Here's the problem: The company has ... grown pretty fast in a short period of time and Wall Street analysts have continued to extrapolate that into the future."

The stock saw its worst day since July 1, 2014, when it dropped 14.92 percent, and was the biggest decliner in the .

"If I could encapsulate it in one sentence, I'd say this: The company is doing fine; Wall Street didn't do it's homework," said Osha, who has a "sell" rating on the stock.

Disclosures: JMP Securities makes a market in Acuity Brands and expects to receive or seek compensation for investment banking services from Acuity Brands.