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Itron Inc (ITRI)
NASDAQ:ITRI
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Itron
(NASDAQ:ITRI)
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Rating:69Neutral
Price Target:
$106.00
▲(6.49% Upside)
Action:DowngradedDate:02/18/26
The score is driven primarily by strong financial performance (margin expansion, robust free cash flow, and a de-risked balance sheet). This is partially offset by weak technicals (price below key moving averages with negative momentum) and a near-term guidance headwind (modest 2026 growth with EPS dilution from acquisitions). Valuation appears reasonable with a ~16x P/E.
Positive Factors
Sustained margin expansion
Margin expansion to record levels reflects structural improvement in product mix, pricing and operational execution across segments. Higher and more durable gross and operating margins increase earnings resilience, allow reinvestment in software/recurring offerings, and support cash generation even with uneven top-line trends.
Strong free cash flow and deleveraging
Material FCF improvement and a large reduction in gross debt materially strengthen the balance sheet. Reliable cash generation funds strategic M&A, buybacks and working capital without stress, lowering financial risk and increasing capacity to invest in ARR/recurring-business scale.
Growing recurring revenue and backlog
Rapid ARR growth and a multi-billion backlog signal a durable shift toward higher-margin, recurring revenue. A large, growing pipeline and outcomes backlog provide multi-quarter visibility, smoothing revenue volatility and enabling predictable subscription and services scaling over time.
Negative Factors
Uneven revenue growth and near-term pressure
Top-line weakness and modest forward guidance indicate persistent demand/timing headwinds. Sluggish revenue growth limits operating leverage upside and constrains visibility into sustainable sales momentum, making durable margin gains more dependent on cost discipline than on consistent top-line lift.
Acquisition dilution and near-term cash strain
Large acquisitions expand TAM and resiliency offerings but create near-term EPS dilution and require significant cash/debt activity. Integration and payback risk can pressure margins and returns if synergies or cross-sell take longer, delaying the expected accretion until 2027 and beyond.
Lumpy bookings and product revenue declines
Project timing, legacy declines and book-to-ship lumpiness create volatile device and network revenues. Structural volatility in hardware/project bookings complicates forecasting, pressures short-term growth, and increases reliance on services/ARR to stabilize overall revenue and margins.
Itron (ITRI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.48B
Dividend YieldN/A
Average Volume (3M)768.47K
Price to Earnings (P/E)15.2
Beta (1Y)1.07
Revenue Growth0.14%
EPS Growth14.12%
CountryUS
Employees5,040
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)2.46
Shares Outstanding44,941,208
10 Day Avg. Volume1,295,716
30 Day Avg. Volume768,469
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)2.45
Price to Sales (P/S)1.77
P/FCF Ratio11.03
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue1.96
Enterprise Value/Gross Profit5.21
Enterprise Value/Ebitda12.09
Forecast
1Y Price Target
$136.71Price Target Upside37.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue through multiple streams, primarily from the sale of hardware, software, and services related to utility metering and management. Key revenue streams include the sale of smart meters and related devices, software licenses for data management and analytics, and ongoing support and maintenance services. Additionally, Itron earns revenue from consulting services that assist utilities in optimizing their operations. The company also benefits from partnerships with various utility companies and municipalities, providing tailored solutions that address specific resource management challenges. Significant contracts and long-term agreements with major utility providers contribute to Itron's financial stability and growth.
Itron Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive operational and financial trajectory: record margins, EBITDA, EPS and strong free cash flow, meaningful ARR growth (20% YoY), robust backlog and pipeline expansion, and strategic acquisitions that expand TAM and are expected to be accretive by 2027. Near-term headwinds include Q4 and full-year revenue declines vs. 2024, weaker Device and Network revenues due to timing/legacy declines, short-term EPS dilution and cash use related to acquisitions, and continued lumpy booking/project timing. Overall the business is being positioned for durable, higher-margin recurring revenue growth even as the company navigates short-term execution and integration impacts.Q4-2025 Updates
Positive Updates
Record Quarterly Financial Performance
Q4 revenue of $572,000,000; adjusted EBITDA of $99,000,000 (17% of revenue); non-GAAP EPS of $2.46 (quarterly record); free cash flow of $112,000,000. GAAP net income $102,000,000 ($2.21) vs prior year $58,000,000.
Best-in-Class Margins
Company record adjusted gross margin of 40.7% in Q4, up ~580 basis points year-over-year; full-year gross margin 37.7% in 2025 (record).
Strong Cash Generation and Leverage Position
Full-year 2025 free cash flow $383,000,000 (16.2% of revenue). Cash and equivalents $1,020,000,000 and net leverage of 0.7x as of quarter end.
Bookings, Backlog and Pipeline Momentum
Q4 bookings $737,000,000; total backlog $4,500,000,000. Pipeline growth up 27% from 2024 to 2025; Outcomes backlog over $1,000,000,000 (up 58% year-over-year).
Recurring Revenue and ARR Expansion
Introduced ARR metric: $368,000,000 at year-end Q4, up ~20% year-over-year. Company expects mid-teens to ~20% ARR growth into 2026.
Segment Margin Improvements and Records
Device Solutions adjusted gross margin 34.4% (+780 bps YoY) and operating margin 26.6% (+670 bps). Network Solutions adj gross margin 42% (+690 bps) and operating margin 32.2% (+620 bps). Outcomes operating margin improved 420 bps.
Strategic Acquisitions and New Resiliency Segment
Closed Urbint (Nov) and announced/closed LocusView (2026). New Resiliency Solutions segment launched; management expects $65M–$70M revenue contribution in 2026 with ~70% gross margins and long-term accretion to revenue and EBITDA.
Product Adoption and Usage Metrics
Endpoints up 25% year-over-year; number of apps up 70% year-over-year; over 3,000,000 connected devices dispatching ~70 GWh/year. Example: 3.5 million restoration hours usage for emergency preparedness product during a major winter storm.
Negative Updates
Revenue Pressure and Year-over-Year Declines
Q4 revenue was lower than the prior year and full-year 2025 revenue was $2,370,000,000, down 3% year-over-year (2024 included catch-up revenue). Q1 2026 guidance implies ~6% revenue decline vs prior-year quarter.
Device and Network Revenue Contraction
Device Solutions revenue decreased ~7% on a constant currency basis in Q4 due to expected legacy declines and timing; Network Solutions revenue decreased ~15% year-over-year primarily from project timing.
Outcomes Gross Margin Mix Headwind
Outcomes adjusted gross margin decreased ~230 basis points year-over-year in Q4 due to a lower software license mix despite record Outcomes revenue (+22% constant currency).
Resiliency Solutions Early Losses
Resiliency Solutions contributed only $3,000,000 of Q4 revenue and reported a negative operating margin of 3.6% in the quarter as the acquisitions integrate.
Short-Term EPS Dilution from Acquisitions
2026 non-GAAP EPS guidance $5.75–$6.25 (midpoint implies ~1% revenue growth but EPS down vs 2025). Management cites a ~ $0.32–$0.38 per-share drag in 2026 driven by the two acquisitions and lower interest income; expected EPS accretion only by 2027.
Cash Use for Acquisitions and Buyback
Q4 cash down $312,000,000 vs prior quarter driven by $325,000,000 cash paid for Urbint and $100,000,000 stock buyback (partially offset by Q4 FCF of $112,000,000). LocusView $525,000,000 closed in 2026 and increases near-term cash/debt activity.
Bookings and Book-to-Ship Lumpiness
Full-year bookings were down vs 2024 (management noted ~4% decline year-over-year for full-year bookings). Company continues to see lumpy project timing and some book-and-ship behaviors driven by customer/regulatory uncertainty.
Near-Term Guidance Risks
2026 revenue guidance range ($2.35B–$2.45B) is modest (midpoint ~1% growth vs 2025) and Q1 2026 EPS guidance ($1.20–$1.30) is down ~ $0.27 vs prior year, highlighting near-term growth and earnings headwinds.
Company Guidance
Itron guided full‑year 2026 revenue of $2,350,000,000 to $2,450,000,000 (midpoint ~+1% vs. 2025) and non‑GAAP EPS of $5.75 to $6.25, assuming a 22% effective tax rate (normalized midpoint implies roughly a $0.32 YoY EPS decline driven by recent acquisitions). The company said its new Resiliency Solutions businesses are expected to contribute about $65,000,000–$70,000,000 of 2026 revenue with ~70% gross margins, but the two acquisitions (totaling ~$850,000,000) will be dilutive to 2026 EPS by ~ $0.38 and are expected to be accretive in 2027. For Q1 2026 Itron guided revenue of $565,000,000–$575,000,000 (down ~6% YoY) and non‑GAAP EPS of $1.20–$1.30 (midpoint down ~ $0.27 YoY), noting lower interest income reduces Q1 EPS by ~ $0.13. The company also reported year‑end 2025 ARR of $368,000,000 and expects ARR growth in 2026 in the mid‑teens up to ~20% YoY.Itron Financial Statement Overview
Summary
Strong turnaround and quality of earnings: profitability and margins expanded meaningfully into 2025, free cash flow strengthened sharply (FCF matching net income in 2025), and leverage improved materially with a major 2025 debt reduction. Key risk is uneven revenue growth, including a 2025 top-line decline after strong 2023–2024.Income Statement
Profitability has improved meaningfully versus the 2020–2022 loss period, with solid results in 2023–2025: net margin rose from ~4.5% (2023) to ~9.8% (2024) and ~12.7% (2025), alongside gross margin expansion to ~37.7% (2025). Revenue growth has been uneven—strong in 2023–2024, but slightly down in 2025—so the earnings strength appears driven more by margin improvement than sustained top-line acceleration.74
Positive
Balance Sheet
Leverage improved sharply in 2025 as total debt fell to ~$571M from ~$1.28B in 2024, bringing debt relative to equity down to ~0.33x (from ~0.92x). Equity has built over time, and returns to shareholders are strong in 2024–2025 (ROE ~17–18%), a major rebound from negative levels in 2020–2022. The key watch item is that the capital structure was meaningfully more levered as recently as 2024 (and 2020), indicating the balance sheet has improved but hasn’t always been consistently conservative.78
Positive
Cash Flow
Cash generation strengthened materially: operating cash flow rose to ~$406M in 2025 (vs. ~$238M in 2024), and free cash flow also reached ~$406M in 2025. Cash flow quality is good, with free cash flow matching net income in 2025 (and covering most of net income in prior years), supporting the sustainability of earnings. Volatility remains a consideration given the very weak cash flow year in 2022, but the last three years show a clear upward trajectory.81
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.37B | 2.44B | 2.17B | 1.80B | 1.98B |
| Gross Profit | 887.51M | 839.32M | 713.91M | 522.19M | 573.17M |
| EBITDA | 382.88M | 321.43M | 226.91M | 84.61M | 121.03M |
| Net Income | 301.06M | 239.10M | 96.92M | -9.73M | -81.25M |
Balance Sheet | |||||
| Total Assets | 3.72B | 3.41B | 2.60B | 2.38B | 2.39B |
| Cash, Cash Equivalents and Short-Term Investments | 1.02B | 1.05B | 302.05M | 202.01M | 162.58M |
| Total Debt | 1.29B | 1.28B | 502.46M | 515.10M | 507.54M |
| Total Liabilities | 1.98B | 2.00B | 1.27B | 1.19B | 1.25B |
| Stockholders Equity | 1.72B | 1.39B | 1.31B | 1.17B | 1.12B |
Cash Flow | |||||
| Free Cash Flow | 380.85M | 207.61M | 98.09M | 4.75M | 110.36M |
| Operating Cash Flow | 403.74M | 238.18M | 124.97M | 24.50M | 145.04M |
| Investing Cash Flow | -349.65M | -63.41M | -23.31M | 40.52M | -34.88M |
| Financing Cash Flow | -95.25M | 579.57M | -3.51M | -18.74M | -152.89M |
Itron Technical Analysis
Positive
99.54
Price Trends
97.94
Positive
105.86
Negative
115.02
Negative
Market Momentum
-0.17
Positive
50.87
Neutral
58.23
Neutral
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 99.54 is above the 20-day moving average (MA) of 99.51, above the 50-day MA of 97.94, and below the 200-day MA of 115.02, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 50.87 is Neutral, neither overbought nor oversold. The STOCH value of 58.23 is Neutral, 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.99B | 53.07 | 9.25% | 0.16% | 13.13% | 24.02% | |
73 Outperform | $5.80B | 14.86 | 35.39% | 0.26% | 1.76% | 4.10% | |
71 Outperform | $4.62B | 33.03 | 21.47% | 0.82% | 12.11% | 16.45% | |
71 Outperform | $8.07B | 35.43 | 9.74% | ― | 7.40% | 13.79% | |
69 Neutral | $4.48B | 15.24 | 19.38% | ― | 0.14% | 14.12% | |
68 Neutral | $5.34B | -189.02 | 1.10% | 1.43% | -8.07% | 63.50% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ITRI
Itron
95.21
2.61
2.82%
BMI
Badger Meter
156.20
-48.45
-23.67%
ESE
Esco Technologies
277.04
118.36
74.59%
SANM
Sanmina-Sci
147.87
62.98
74.19%
ST
Sensata
37.02
7.99
27.51%
VNT
Vontier
40.43
2.63
6.97%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.