Itron (ITRI): Buy, Sell, or Hold Post Q4 Earnings?

March 17, 2025 at 05:05 AM EDT

ITRI Cover Image

Itron has been treading water for the past six months, recording a small loss of 0.7% while holding steady at $103.61.

Is now the time to buy Itron, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.

We don't have much confidence in Itron. Here are three reasons why there are better opportunities than ITRI and a stock we'd rather own.

Why Is Itron Not Exciting?

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

1. Long-Term Revenue Growth Flatter Than a Pancake

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Itron struggled to consistently increase demand as its $2.44 billion of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of lacking business quality. Itron Quarterly Revenue

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Itron’s revenue to rise by 1.2%, a deceleration versus its 16.6% annualized growth for the past two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.

3. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Itron historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 3.2%, lower than the typical cost of capital (how much it costs to raise money) for industrials companies.

Itron Trailing 12-Month Return On Invested Capital

Final Judgment

Itron isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 21.1× forward price-to-earnings (or $103.61 per share). At this valuation, there’s a lot of good news priced in - we think there are better investment opportunities out there. We’d recommend looking at a dominant Aerospace business that has perfected its M&A strategy.

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