LSI’s third quarter results outpaced Wall Street’s revenue and profit expectations, but the market responded negatively following the report. Management attributed the solid quarter to double-digit growth in both Display Solutions and Lighting segments, with volume gains driving much of the top-line strength. CEO James Clark noted that recent account conversions and a strong presence in priority verticals—such as grocery, convenience stores, and quick-serve restaurants—helped LSI outperform broader nonresidential construction trends. The company’s ability to manage supply chain disruptions and maintain competitive lead times was highlighted as a differentiator, while integration of recent acquisitions contributed to expanded capabilities and customer reach.

Is now the time to buy LYTS? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From LSI’s Q3 Earnings Call

• Aaron Spychalla (Craig-Hallum Capital Group) asked about the split between volume and price in Lighting growth, and CEO James Clark replied that increases are “almost exclusively volume,” with pricing stable and recent large projects contributing to gains.
• Spychalla (Craig-Hallum) followed up on the grocery segment’s outlook, questioning whether spending patterns were returning to normal. Clark explained that order activity is stabilizing and the pipeline remains healthy, though extraordinary year-over-year growth seen previously will not repeat.
• Spychalla (Craig-Hallum) inquired about operational efficiency priorities, and Clark stated that internal talent development and efficiency improvements are central to reaching future EBITDA targets, with progress underway.
• Alex Rygiel (Texas Capital) questioned capacity for overlapping convenience store projects. Clark confirmed LSI has at least 20% capacity to absorb additional projects and can quickly staff up as needed.
• Amit Dayal (H.C. Wainwright) asked if pricing power is capped, and Clark responded that pricing remains fair and stable, with cost pass-throughs managed through project-based agreements, and volume rather than price driving sales increases.

Catalysts in Upcoming Quarters

In the upcoming quarters, the StockStory team will monitor (1) the pace of new project awards and customer conversions in targeted verticals, (2) improvements in operational efficiency and progress toward margin expansion goals, and (3) successful integration and alignment of recent acquisitions. Additionally, we will track normalization in grocery and convenience store activity as the industry adjusts following last year’s exceptional demand surge.

LSI currently trades at $19.10, down from $22.98 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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