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Itron Inc (ITRI)
NASDAQ:ITRI

Itron (ITRI) AI Stock Analysis

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Itron

(NASDAQ:ITRI)

74Outperform
Itron's strong financial performance, evidenced by impressive growth in revenue and profit margins, is a key strength. The technical indicators show positive momentum, though caution is advised due to potential overbought conditions. Valuation appears reasonable, though the absence of a dividend yield is notable. The earnings call added positively to sentiment, despite some concerns about specific segment performance and tariff impacts.
Positive Factors
Earnings and financial performance
Itron posted solid results, with better than expected profitability.
Growth opportunities
Itron has secured a significant award with LUMA in Puerto Rico to deploy around 1.5 million smart meters, which is expected to generate substantial new business.
Strategic partnerships and collaborations
The company's recently announced expanded collaborations with Microsoft, Schneider Electric, and Norgesnett, as well as awards with the City of Helsingborg, are highlighted as positive developments.
Negative Factors
Bookings and demand concerns
3Q24 bookings were weaker than anticipated, with a book-to-bill ratio of ~0.8x, causing some investor concerns.
Tariff impacts
Management issued relatively conservative guidance, indicating that tariff impacts were more likely to impact margins in the second half of the year.
Trade policy uncertainty
Trade policy dynamic creates uncertainty given exposure to proposed tariffs on Mexican imports.

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

Itron Business Overview & Revenue Model

Company DescriptionItron, Inc., a technology and service company, provides end-to-end solutions that help manage operations in the energy, water, and smart city space worldwide. The company operates through three segments: Device Solutions, Networked Solutions, and Outcomes. The Device Solutions segment offers hardware products that are used for measurement, control, or sensing. The Networked Solutions segment provides a combination of communicating devices, such as smart meters, modules, endpoints, and sensors; network infrastructure; and associated application software for acquiring and transporting application-specific data. The Outcomes segment offers value-added, enhanced software and services for managing, organizing, analyzing, and interpreting data to enhance decision making, maximize operational profitability, drive resource efficiency, and deliver results for consumers, utilities, and smart cities. In addition, it offers implementation, project management, installation, consulting, and post-sale maintenance support services, as well as cloud and software-as-a-service; and extended or customer-specific warranties. It offers its products and services under the Itron brand. The company markets its products directly through its sales force, as well as through indirect sales force consisting of distributors, sales representatives, partners, and meter manufacturer representatives to utilities and municipalities. Itron, Inc. was incorporated in 1977 and is headquartered in Liberty Lake, Washington.
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
Overall, Itron exhibits a strong financial performance with a solid income growth trajectory, efficient balance sheet management, and robust cash flow generation. The company has successfully improved profitability and reduced leverage, positioning itself well for future growth. Areas for improvement include optimizing operational leverage and maintaining prudent capital expenditure.
Income Statement
80
Positive
Itron has demonstrated strong growth in its income statement, with revenue increasing from $1.80 billion in 2022 to $2.44 billion in TTM (Trailing-Twelve-Months). Gross profit margin improved to 34.6% from previous levels, reflecting operational efficiency. The net profit margin also strengthened to 10.4% in TTM, indicating enhanced profitability. However, the EBIT and EBITDA margins, at 11.3% and 14.4% respectively, suggest there is room for improved operational leverage.
Balance Sheet
75
Positive
Itron's balance sheet is solid, with a favorable debt-to-equity ratio improving significantly due to reduced debt levels and increased equity. The debt-to-equity ratio is a manageable 0.41, indicating low leverage. The return on equity (ROE) is robust at 17.0%, showcasing effective use of shareholders' equity to generate profits. However, the equity ratio stands at 42.5%, suggesting a moderate reliance on liabilities to finance assets.
Cash Flow
78
Positive
Itron's cash flow position is strong, with free cash flow growing by 28.4% from the previous year, driven by improved operating cash flows. The operating cash flow to net income ratio is 1.06, indicating that the company is effectively converting profits into cash. The free cash flow to net income ratio is 1.05, further highlighting the company's cash generation capability. Despite these strengths, the firm should continue monitoring capital expenditures to sustain cash flow growth.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.44B2.17B1.80B1.98B2.17B
Gross Profit
839.32M713.91M522.19M573.17M602.17M
EBIT
264.11M128.87M19.34M23.74M84.19M
EBITDA
356.19M191.50M57.74M7.07M96.09M
Net Income Common Stockholders
239.10M96.92M-9.55M-78.30M-56.88M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.05B302.05M202.01M162.58M206.93M
Total Assets
3.41B2.60B2.38B2.39B2.61B
Total Debt
1.27B502.46M515.10M507.54M987.76M
Net Debt
216.54M200.41M313.09M344.96M780.83M
Total Liabilities
2.00B1.27B1.19B1.25B1.77B
Stockholders Equity
1.39B1.31B1.17B1.12B816.55M
Cash FlowFree Cash Flow
207.61M98.09M4.75M120.11M63.31M
Operating Cash Flow
238.18M124.97M24.50M154.79M109.51M
Investing Cash Flow
-63.41M-23.31M40.52M-34.88M-41.04M
Financing Cash Flow
579.57M-3.51M-18.74M-152.89M-11.58M

Itron Technical Analysis

Technical Analysis Sentiment
Positive
Last Price108.23
Price Trends
50DMA
104.03
Positive
100DMA
105.59
Positive
200DMA
105.88
Positive
Market Momentum
MACD
1.85
Negative
RSI
55.70
Neutral
STOCH
87.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ITRI, the sentiment is Positive. The current price of 108.23 is above the 20-day moving average (MA) of 102.90, above the 50-day MA of 104.03, and above the 200-day MA of 105.88, indicating a bullish trend. The MACD of 1.85 indicates Negative momentum. The RSI at 55.70 is Neutral, neither overbought nor oversold. The STOCH value of 87.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$4.93B20.8917.70%12.29%147.67%
VNVNT
73
Outperform
$4.92B12.1335.88%0.31%-3.59%-11.30%
72
Outperform
$4.83B25.497.93%1.23%-0.99%
66
Neutral
$4.39B68.769.03%7.67%-12.33%
64
Neutral
$4.71B45.238.02%1.11%8.56%18.99%
64
Neutral
$4.66B43.724.39%1.46%-3.43%-50.48%
60
Neutral
$10.95B10.52-7.07%3.00%7.30%-12.04%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ITRI
Itron
108.23
1.22
1.14%
CGNX
Cognex
27.83
-15.61
-35.93%
NOVT
Novanta
121.98
-37.91
-23.71%
LFUS
Littelfuse
192.80
-51.95
-21.23%
MKSI
MKS Instruments
75.83
-45.27
-37.38%
VNT
Vontier
33.29
-6.04
-15.36%

Itron Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: -2.75%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with strong earnings growth, margin expansion, and significant bookings and backlog levels. However, there were concerns about revenue decline in the Network Solutions segment and potential tariff impacts on EBITDA.
Q1-2025 Updates
Positive Updates
Revenue Growth and Margin Expansion
Itron reported first quarter revenue of $607 million, a 1% increase year-over-year. The company achieved a record gross margin of 35.8%, which was 180 basis points higher than last year, driven by favorable product mix and operational efficiencies.
Strong Earnings Growth
Non-GAAP earnings per share increased to $1.52, up from $1.24 a year ago. Adjusted EBITDA was $88 million, marking a 15% increase with a company record EBITDA margin of 14.5%.
Device Solutions and Outcomes Segment Performance
Device Solutions segment achieved record gross margin of 30% and operating margin of 24.2%. Outcomes revenue grew 14% year-over-year, supported by increased recurring revenue and software licenses.
Bookings and Backlog
Bookings in the first quarter totaled $530 million, an increase of $169 million from last year. The backlog remained near record levels at $4.7 billion.
Negative Updates
Network Solutions Revenue Decline
Network Solutions revenue decreased 1% year-over-year due to a higher-than-normal Q1 2024 level, which included the catch-up of previously constrained revenue.
Tariff Impact on EBITDA
The estimated EBITDA impact for the year due to tariffs is approximately $15 million, net of mitigation measures such as alternate sourcing and pricing adjustments.
Company Guidance
During Itron's First Quarter 2025 Earnings Conference Call, the company provided a comprehensive financial update and guidance for the upcoming period. Key metrics highlighted included a revenue of $607 million, an adjusted EBITDA of $88 million, and a non-GAAP earnings per share of $1.52 for the first quarter. The company also reported a free cash flow of $67 million and a book-to-bill ratio of 0.9:1, resulting in a backlog of $4.7 billion. Gross margin reached a quarterly record of 35.8%, driven by a favorable product mix and operational efficiencies. The company anticipates second-quarter revenue between $605 million and $615 million, with non-GAAP earnings per share expected to range from $1.30 to $1.40, indicating a year-over-year growth of approximately 12% at the midpoint. Additionally, the potential EBITDA impact from tariffs was estimated at $15 million, net of mitigation measures, though this remains subject to the dynamic tariff environment.

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.