The ASX small-cap stock Beacon Lighting Group Ltd (ASX: BLX) looks like a bargain buy to me at a share price of $3.11.
This business is best known for its national chain of Beacon Lighting stores across Australia. Beacon Lighting also has a trade segment (for electricians, builders, architects and interior designers), an e-commerce offering and other segments such as international sales.
Following the 17% decline of the Beacon Lighting share price, as shown on the chart below, I think the ASX small-cap stock is a compelling buy.
Recovering momentum
As a business linked with the wider economy, consumer spending, construction and trade activity, the last couple of years have not been easy for the ASX small-cap stock.
But, the signs are now promising that the company can deliver growth for the foreseeable future.
When the company announced its FY25 result, it said that total sales grew by 1.8% over the 12 months. That's not fast growth.
However, Beacon Lighting said that company store sales momentum in the fourth quarter of FY25 had continued into the start of FY26. It also revealed positive momentum with trade sales continuing into FY26.
With multiple RBA rate cuts this year, I think there is momentum for the ASX small-cap stock to deliver earnings growth. Any additional RBA reductions could help earnings further.
Store growth potential
The company already has a solid position in the Australian market, but it has plans to open dozens more stores.
In FY25, the business finished the year with 127 company stores and two franchised stores. During the period, it opened four new stores (three in NSW and one in Victoria) and also relocated three places into larger stores.
Excitingly, the business notes that store network research from March 2023 identified the potential for 195 Beacon Lighting stores in Australia. That implies a possible increase of around 50% over the long-term.
International potential
Australia is a great country to do business, but the rest of the world is a much bigger market. Overseas could become a larger contributor to the company if the international segment continues growing.
In FY25, Beacon international increased sales and profits, with Hong Kong and Europe both achieving double-digit sales increases. The Tmall Global sales channel in China saw a 72.3% sales increase during the 2025 financial year – Beacon Lighting says that China is a very exciting and profitable business.
The ASX small-cap stock could grow significantly in both Australia and overseas, which makes me believe it's a bargain today after the recent decline.
