Itron (ITRI) AI Stock Analysis

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Itron

(NASDAQ:ITRI)

77Outperform

Itron's strong financial performance and positive earnings call highlight its recovery and growth trajectory. The stock's valuation is reasonable, though technical indicators suggest a cautious approach. Challenges in certain markets and segments are present, but the overall outlook remains robust.

Positive Factors

Bookings and Backlog

Itron finished the year with a record backlog of $4.7B, reflecting a B2B of 2.29:1 on record quarterly bookings of $1.4B.

Financial Performance

Itron issued Q4/24 results, reporting revenues of ~$613M (up ~6% y/y) and Adj. EBITDA of $81M (up ~19% y/y), with both top- and bottom-line numbers exceeding estimates and Street consensus.

Strategic Wins

Itron has secured a significant award with LUMA in Puerto Rico to deploy around 1.5mn smart meters, which is expected to generate substantial new business.

Negative Factors

Product Demand

Devices sales contracted by approximately (4.4%), primarily due to weaker demand for legacy electric meter products.

Sales Growth Concerns

Total backlog stands at $3.97B, while bookings came in at $487M, indicating increased risk of lumpiness in sales growth.

Trade Policy Uncertainty

Trade policy dynamic creates uncertainty given exposure to proposed tariffs on Mexican imports.

Itron (ITRI) vs. S&P 500 (SPY)

Market Cap

$4.32B

Dividend YieldN/A

Average Volume (3M)708.77K

Price to Earnings (P/E)18.2

Beta (1Y)1.19

Revenue Growth12.29%

EPS Growth147.67%

CountryUS

Employees5,040

SectorTechnology

Sector Strength40

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)5.18

Shares Outstanding45,570,045

10 Day Avg. Volume484,986

30 Day Avg. Volume708,768

Financial Highlights & Ratios

PEG Ratio0.12

Price to Book (P/B)N/A

Price to Sales (P/S)1.96

Price to Cash Flow (P/CF)15.00

P/FCF Ratio17.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$131.50

Price Target Upside42.87% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Itron Business Overview & Revenue Model

Company DescriptionItron, Inc. is a technology and services company that provides solutions to optimize the delivery and use of energy and water. The company operates primarily in the utility sector, offering products such as smart meters, network communication solutions, and data analytics software. Itron's solutions are designed to help utilities manage resources more efficiently, improve service delivery, and enhance customer engagement.

How the Company Makes MoneyItron makes money by selling its hardware and software solutions to utility companies. Its primary revenue streams include the sale of smart meters and network communication devices, which are used to measure and transmit energy and water consumption data. Additionally, Itron generates revenue through its software and services segment, which includes data analytics, managed services, and consulting. The company also engages in long-term contracts and partnerships with utility providers, offering solutions that help them modernize their infrastructure and improve operational efficiency. These partnerships often involve recurring revenue through service agreements and software subscriptions.

Itron Financial Statement Overview

Summary

Itron's financial performance is strong with robust revenue and profit growth, improved margins, and solid balance sheet management. The company has shown significant recovery and financial stability, with a low debt-to-equity ratio and strong cash generation.

Income Statement

Very Positive

Itron's income statement reflects a strong recovery and growth trajectory. The gross profit margin is robust, and the net profit margin has improved significantly from negative figures to a healthy positive margin. Revenue growth is strong, with a noteworthy increase from the previous year. Both EBIT and EBITDA margins have shown substantial improvement, indicating an efficient operation and a return to profitability.

Balance Sheet

Positive

The balance sheet is solid, with a low debt-to-equity ratio reflecting good financial leverage management. The return on equity has improved significantly, indicating better profitability for shareholders. The equity ratio indicates a strong position, with a healthy proportion of assets funded by equity, reducing financial risk.

Cash Flow

Positive

Itron's cash flow statement shows strong operating cash flow, which has supported solid free cash flow generation. The free cash flow growth rate is impressive, and the operating cash flow to net income ratio indicates that the company efficiently converts its profits into cash. The free cash flow to net income ratio is favorable, showing good cash generation relative to income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.44B	2.17B	1.80B	1.98B	2.17B
	Gross Profit
839.32M	713.91M	522.19M	573.17M	602.17M
	EBIT
264.11M	128.87M	19.34M	23.74M	84.19M
	EBITDA
356.19M	191.50M	57.74M	7.07M	96.09M
	Net Income Common Stockholders
239.10M	96.92M	-9.55M	-78.30M	-56.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.05B	302.05M	202.01M	162.58M	206.93M
	Total Assets
3.41B	2.60B	2.38B	2.39B	2.61B
	Total Debt
157.56M	502.46M	515.10M	507.54M	987.76M
	Net Debt
-893.67M	200.41M	313.09M	344.96M	780.83M
	Total Liabilities
2.00B	1.27B	1.19B	1.25B	1.77B
	Stockholders Equity
1.39B	1.31B	1.17B	1.12B	816.55M
Cash Flow		Free Cash Flow
238.18M	98.09M	4.75M	120.11M	63.31M
	Operating Cash Flow
238.18M	124.97M	24.50M	154.79M	109.51M
	Investing Cash Flow
-63.41M	-23.31M	40.52M	-34.88M	-41.04M
	Financing Cash Flow
579.57M	-3.51M	-18.74M	-152.89M	-11.58M

Itron Technical Analysis

Technical Analysis Sentiment

Negative

Last Price92.04

Price Trends

50DMA

103.49

Negative

100DMA

107.65

Negative

200DMA

105.48

Negative

Market Momentum

MACD

0.46

Positive

RSI

48.70

Neutral

STOCH

28.77

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITRI, the sentiment is Negative. The current price of 92.04 is below the 20-day moving average (MA) of 103.88, below the 50-day MA of 103.49, and below the 200-day MA of 105.48, indicating a bearish trend. The MACD of 0.46 indicates Positive momentum. The RSI at 48.70 is Neutral, neither overbought nor oversold. The STOCH value of 28.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ITRI.

Itron Risk Analysis

Itron disclosed 37 risk factors in its most recent earnings report. Itron reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Itron Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITRI	77 Outperform	$4.32B	18.21	17.70%	―	12.29%	147.67%
NOVT	77 Outperform	$3.78B	57.86	9.03%	―	7.67%	-12.33%
MKSI	65 Neutral	$4.25B	22.41	7.93%	1.40%	-0.99%	―
VNT	63 Neutral	$4.23B	10.35	43.49%	0.35%	-3.75%	13.76%
CGNX	62 Neutral	$4.15B	39.85	7.03%	1.26%	9.19%	-5.77%
LFUS	61 Neutral	$3.77B	38.13	4.62%	1.80%	-7.28%	-56.46%
Sector *	57 Neutral	$18.45B	9.41	-13.97%	2.74%	5.04%	-23.56%

* Technology Sector Average

Performance Comparison

ITRI

Itron

92.04

0.98

1.08%

CGNX

Cognex

23.27

-18.59

-44.41%

NOVT

Novanta

102.65

-67.84

-39.79%

LFUS

Littelfuse

149.72

-88.76

-37.22%

MKSI

MKS Instruments

58.78

-69.69

-54.25%

VNT

Vontier

28.04

-14.60

-34.24%

Itron Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -0.60% | Next Earnings Date: May 5, 2025

Earnings Call Sentiment Positive

Itron's earnings call highlights significant financial achievements with record revenues, strong bookings, and improved margins. However, challenges such as the decline in device solutions and back-end loaded bookings present some concerns. Overall, the positive aspects outweigh the negatives, indicating a solid financial and strategic position.

Highlights

Record Full-Year Revenue

Itron achieved record full-year revenue in its growth segments of network solutions and outcomes, with total revenue for 2024 at $2.44 billion, a 12% increase compared to 2023.

Strong Q4 Financial Performance

Q4 revenue reached $613 million, a 6% increase year-over-year, with adjusted EBITDA of $81 million, reflecting a 19% increase. The free cash flow for Q4 was $70 million, compared to $39 million in the previous year.

Record Quarterly Bookings

Q4 2024 bookings were at $1.4 billion, contributing to a record total backlog of $4.7 billion. The full-year 2024 bookings were $2.7 billion, leading to a 2024 book-to-bill ratio of 1.11.

Improved Margins and Free Cash Flow

Itron achieved a new record in gross margin at 34.4% for the year, up 160 basis points from the previous year, and a record free cash flow of $208 million, up from $98 million in 2023.

Partnerships and Expansion

Significant partnerships such as with Potomac Electric Power Company and successful expansion in outcomes segment, with 13.4 million distributed intelligence endpoints shipped and over 15 million applications licensed.

Lowlights

Decline in Device Solutions Revenue

Device solutions revenue decreased by 5% on a constant currency basis, primarily driven by an expected decline in legacy electric meter sales.

Challenges in European Water Market

Cautious outlook in the European water market due to economic difficulties, which may not sustain the above-expected performance seen in 2024.

Back-End Loaded Bookings

The back-end loaded nature of 2024 bookings means that most of the new bookings will translate to revenue beyond 2025, affecting near-term revenue growth.

Company Guidance

During Itron's Fourth Quarter 2024 Earnings Release Conference Call, the company reported robust financial performance, with fourth quarter revenue reaching $613 million, adjusted EBITDA at $81 million, non-GAAP earnings per share of $1.35, and free cash flow of $70 million. The company achieved record quarterly bookings of $1.4 billion, leading to a total backlog of $4.7 billion. Full-year 2024 bookings totaled $2.7 billion, with a book-to-bill ratio of 1.11. Itron anticipates 2025 revenue between $2.4 billion and $2.5 billion and non-GAAP EPS ranging from $5.20 to $5.60 per share. The company remains focused on efficiency to drive cash flow and profitability growth, confident in meeting 2027 targets for revenue growth and margin expansion.

Itron Corporate Events

Executive/Board ChangesShareholder Meetings

Itron Announces Retirement of Two Board Members

Neutral

Feb 24, 2025

On February 19, 2025, Itron, Inc. announced the upcoming retirement of two board members, Lynda L. Ziegler and Mary C. Hemmingsen, at the end of their terms during the 2025 Annual Meeting of Shareholders. Lynda L. Ziegler, who has served on the board since 2013, and Mary C. Hemmingsen, a member since 2022, both decided not to stand for re-election due to personal reasons unrelated to any disagreements with the company. Consequently, the board will reduce its size from nine to seven directors effective May 8, 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.