Itron, Inc. (ITRI): A Bull Case Theory

We came across a bullish thesis on Itron, Inc. on Valueinvestorsclub.com by xxxOTK87. In this article, we will summarize the bulls’ thesis on ITRI. Itron, Inc.'s share was trading at $126.61 as of October 9th. ITRI’s trailing and forward P/E were 21.13 and 19.16 respectively according to Yahoo Finance.

Itron is a leading provider of metering solutions for utilities, positioned to capitalize on a generational replacement cycle and expand market share. The company serves electricity (~60% of revenue), gas (~20%), and water (~20%) utilities through Device Solutions, Networked Solutions, and Outcomes segments. Networked Solutions, which represents the majority of revenue and gross margin, provides Advanced Metering Infrastructure (AMI) and Automated Meter Reading (AMR) endpoints, with AMI enabling two-way communication and improved utility management.

The upcoming replacement cycle, driven by high deployments in 2010–2012 and a backlog from COVID-era delays, is expected to accelerate unit volumes, catalyze adoption of next-generation Distributed Intelligence (DI) meters, and drive an industry growth rate of ~5% through 2029.Itron is uniquely positioned to capture outsized share gains due to its superior DI technology, operational execution, and the strategic restriction of competitor Landis+Gyr’s network access.

Landis faces organizational and product challenges, creating opportunities for Itron to increase market share from 48% in 2024 to potentially 60% by 2029, with incremental adoption of DI endpoints further boosting revenue. Itron’s control over the network layer ensures stickiness and positions it to benefit from meter replacements, including ~12.5 million Landis meters operating on third-party networks.

Valuation supports a compelling investment case, with projected growth of 7–7.5% through 2027, EBITDA margins expanding to 16%, and EPS reaching $7.5, implying a 30% upside to a $160 target by end-2026. Risks include policy shifts affecting utility CapEx, changes to interoperability strategy, and Landis restructuring. Key catalysts include the late-2025 visibility into the replacement cycle and the 2026 impact of network access restrictions, which together suggest a significant rerating potential for Itron’s stock over the next two to three years.

Previously we covered a bullish thesis on Badger Meter, Inc. (BMI) by Durable Value Creators in November 2024, which highlighted the company’s leadership in smart water solutions, strong SaaS growth, and adoption of AMI infrastructure across utilities. The company's stock price has depreciated approximately by 20.8% since our coverage. The thesis still stands as Itron shares a similar industry focus but emphasizes the upcoming utility replacement cycle, Distributed Intelligence meter adoption, and network-driven share gains.

Itron, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held ITRI at the end of the second quarter which was 40 in the previous quarter. While we acknowledge the potential of ITRI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.