LSI Industries (LYTS) has just posted Q2 2026 results with revenue of US$147.0 million and basic EPS of US$0.20, alongside trailing twelve month revenue of US$591.8 million and EPS of US$0.84 that frame the latest quarter against a fuller year of operations. The company has seen quarterly revenue move from US$147.7 million and EPS of US$0.19 in Q2 2025 to US$147.0 million and EPS of US$0.20 in Q2 2026, with net income shifting from US$5.6 million to US$6.3 million over the same period, while trailing net profit margins have eased slightly. This keeps investor attention firmly on how efficiently each dollar of sales is being converted to profit.

See our full analysis for LSI Industries.

With the headline numbers on the table, the next step is to set these results against the widely followed narratives about LSI Industries to see which stories the latest margins and earnings back up and which ones they put under pressure.

TTM earnings outpace recent quarters

• Over the last twelve months, net income of US$25.7 million on US$591.8 million of revenue compares with Q2 2026 net income of US$6.3 million on US$147.0 million of revenue, so the bigger story sits in the rolling year, not just this single quarter.
• What stands out for a bullish view is that five year earnings growth of 22.9% per year and trailing year growth of 9.8% sit alongside a 4.3% net margin in the last twelve months. However, that margin is a touch lower than the prior year's 4.5%, which means:
  • Supporters can point to the higher earnings base and US$0.84 TTM EPS as evidence that profitability has been consistently positive across multiple quarters.
  • At the same time, the small margin slip from 4.5% to 4.3% gives bulls something to watch, because it suggests profit growth has leaned more on volume and efficiency across the year than on fatter margins.

To see how this earnings run ties into longer term growth expectations and valuation checks, get the full story in the latest narrative and pricing breakdown. 📊 Read the full LSI Industries Consensus Narrative.

Revenue growth pace vs projected earnings

• The trailing twelve month revenue of US$591.8 million compares with forecasts that revenue could grow around 6.1% per year, while earnings are forecast around 21.7% per year, so projected profit growth is running ahead of expected sales growth.
• Critics of a bullish stance often focus on that gap, and the recent move in net margin from 4.5% to 4.3%, because:
  • It suggests a lot of the optimistic case relies on earnings continuing to grow faster than revenue even though the latest margin trend is slightly softer, which adds a question about how much further efficiency can carry the story.
  • If future revenue growth stays closer to 6.1% per year while earnings targets sit above 20% per year, the business would need to keep finding ways to convert each extra dollar of sales into more profit than the current 4.3% margin implies.

Valuation gap vs DCF and P/E peers

• With the share price at US$23.25, the provided DCF fair value of US$31.15 and an analyst price target of US$28.67 both sit higher, while the current P/E of 27.2x is below the US Electrical industry at 32.9x and a peer average of 40.8x.
• Supporters of the bullish angle argue that this combination of a lower P/E and higher reference values points to upside. Yet the recent 9.8% trailing earnings growth rate and the 4.3% net margin mean:
  • The apparent discount to DCF fair value and to peer P/E multiples is grounded in real numbers, not just a story, because earnings over the last year have been positive and growing even if not at the five year pace of 22.9% per year.
  • The modest margin step down from 4.5% to 4.3% keeps the valuation debate balanced, as it shows why the stock might trade at a lower multiple than peers even while price references such as the DCF fair value and analyst target sit above US$23.25.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on LSI Industries's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

LSI Industries is growing earnings, but the small slip in net margin from 4.5% to 4.3% shows profitability is not consistently strengthening alongside expectations.

If you want businesses where earnings growth and margins line up more cleanly, check out stable growth stocks screener (2175 results) to focus on companies with steadier revenue and profit trends.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.