Itron Surges 16% in Past Year: Can the Stock Sustain This Momentum?

Itron Inc ITRI stock has proved resilient amid a volatile market environment with a 16.3% gain in the past year. Strong market demand related to grid resiliency, grid capacity, safety and automation is driving demand for ITRI’s solutions. ITRI outpaced estimates in each of the trailing four quarters, with the average surprise being 40.8%.

It has outperformed its Electronic Test Equipment industry’s decline of 8.5% and, the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 3.8% and 8.2%, respectively.

Price Performance

ITRI stock closed the last trading session at $104.76, down 16% from its 52-week high of $124.90. Does this pullback signal a buying opportunity? Let us discuss ITRI’s prospects and determine the best course of action for your portfolio.

Solid Demand Trends Bode Well for ITRI

Steady overall market demand and strong operational performance are the primary growth drivers for Itron.

Momentum in the Grid Edge Intelligence platform bodes well. The platform’s growth is being driven by various factors, including data center-related demand growth, reindustrialization and production localization, as well as electrification of transportation and homes. Itron added that automation of water infrastructure, safety applications for gas customers and the digitalization of their operations were other growth drivers.

Total backlog at the fourth quarter 2024-end was $4.7 billion. Itron's 2024 bookings of $2.7 billion resulted in a book-to-bill ratio of 1:11. The backlog primarily consists of grid-edge intelligence platform content from its Network Solutions and Outcomes segments, including more than 10 million endpoints and related platform components. Due to the back-end-loaded nature of 2024 bookings and the usual time lag from bookings to revenues, most new bookings will likely contribute to revenues beyond 2025.

Considering this timing in its current 2025 revenue guidance, Itron anticipates 2025 revenues to be between $2.4 billion and $2.5 billion, flat year over year at the midpoint. We project total revenues of $2,445.1 million for 2025.

Given the strong prospects, analysts seem bullish about the stock as reflected in solid estimate revision activity. 

Frequent Product Launches to Aid Market Capture

Frequent product launches also bode well, as these can cater to changing market demands, positioning the company to capture market share from competitors.

In March 2025, Itron unveiled IntelliFLEX, a smart grid-edge energy management system that gives utilities real-time control of behind-the-meter DERs. Using Grid-Edge Intelligence helps optimize the grid, unlocking up to 20% more capacity and delaying costly upgrades. In October 2024, Itron introduced its CityEdge portfolio, an open, flexible platform that integrates IoT technologies to address current and future urban challenges. Rebranding its proven smart city and lighting solutions, CityEdge supports cities in five essential areas — smart lighting, traffic management, sustainability, public safety and utilities like energy and water.

In March 2024, Itron unveiled the Low Voltage Distributed Energy Resource Management Solution (LV DERMS). The solution will simultaneously maintain stability within the low-voltage network for CERs like rooftop solar or battery storage. Itron’s LV DERMS model plans to address the complexities of grid instability arising in the LV network due to energy transition. Before that, the company launched Active Transformer Load and Voltage Monitoring (ATLM/ATVM) applications.

Operational Efficiency Driving ITRI’s Margin Expansion

Itron’s gross margin was 34.9%, which expanded 90 basis points on a year-over-year basis. This was due to improved operational efficiencies. Non-GAAP operating income was $70.6 million compared with $60.9 million in the year-ago quarter. 

ITRI’s Valuation 

ITRI presents a compelling investment opportunity with its attractive forward 12-month price-to-earnings ratio of 18.82X, slightly lower than the industry average of 21.48X observed in the last year.

How Should Investors Play the ITRI Stock?

Increasing business pipeline activities and favorable macro trends amid competitive pressures bode well. Discounted valuation and robust estimate revision activity make ITRI, which carries a Zacks Rank #2 (Buy), an appealing investment opportunity. 

Other Stocks to Consider

Some other top-ranked stocks from the broader technology space are Celestica Inc. CLS, InterDigital, Inc. IDCC and ACI Worldwide Inc. ACIW, each sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CLS’ 2025 EPS is pegged at $4.78, unchanged in the past seven days. CLS’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while matching once, with the average surprise being 10.3%. Its shares have increased 68% in the past year. 

The Zacks Consensus Estimate for IDCC’s 2024 earnings is pegged at $10.45, unchanged in the past seven days. IDCC’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing in one occasion, with the average surprise being 158.4%. Its shares have surged 114% in the past year.

The Zacks Consensus Estimate for ACIW’s fiscal 2025 EPS is pegged at $2.73, unchanged in the past seven days. ACIW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 161.3%. The stock has gained 69% in the past year.
 

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This article originally published on Zacks Investment Research (zacks.com).

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