Analyzing Algorhythm (NASDAQ:RIME) and Acuity (NYSE:AYI)

Algorhythm (NASDAQ:RIME) and Acuity (NYSE:AYI) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Risk and Volatility

Algorhythm has a beta of -0.05, meaning that its share price is 105% less volatile than the S&P 500. Comparatively, Acuity has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.

Profitability

This table compares Algorhythm and Acuity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algorhythm	-105.18%	N/A	-166.60%
Acuity	9.13%	20.81%	12.00%

Insider and Institutional Ownership

98.2% of Acuity shares are owned by institutional investors. 9.4% of Algorhythm shares are owned by insiders. Comparatively, 2.8% of Acuity shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Algorhythm and Acuity”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algorhythm	$23.49 million	0.25	-$23.26 million	N/A	N/A
Acuity	$4.35 billion	2.45	$396.60 million	$12.53	27.70

Acuity has higher revenue and earnings than Algorhythm.

Analyst Ratings

This is a summary of current recommendations and price targets for Algorhythm and Acuity, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algorhythm	1	0	0	1	2.50
Acuity	0	2	7	1	2.90

Algorhythm presently has a consensus target price of $5.00, suggesting a potential upside of 126.24%. Acuity has a consensus target price of $395.17, suggesting a potential upside of 13.83%. Given Algorhythm’s higher probable upside, research analysts clearly believe Algorhythm is more favorable than Acuity.

Summary

Acuity beats Algorhythm on 10 of the 12 factors compared between the two stocks.

About Algorhythm

Algorhythm Holdings, Inc., together with its subsidiaries, engages in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings in North America, Australia, the United Kingdom, Europe, and internationally. It offers karaoke products under the Singing Machine brand; licensed karaoke microphone products under the Carpool Karaoke brand; microphone and accessories, and portable Bluetooth microphones under the Party Machine brand; music entertainment singing machines for children under the brand Singing Machine Kids; connected vehicle karaoke devices; and karaoke music subscription services for the iOS and Android platforms, as well as a web-based download store and integrated streaming services for hardware. The company primarily sells its products to retailers, including national chains, warehouse clubs, department stores, lifestyle merchants, specialty stores, and direct mail catalogs and showrooms. The company was formerly known as The Singing Machine Company, Inc. and changed its name to Algorhythm Holdings, Inc. in September 2024. Algorhythm Holdings, Inc. was incorporated in 1982 and is headquartered in Fort Lauderdale, Florida.

About Acuity

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.