Shares of Itron, Inc. ITRI have climbed 49.8% in the past year compared with growth of 7.3% for the industry. Strong demand across the energy and water sectors has been a key driver behind the increasing adoption of Itron's solutions.

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It closed the last session at $108.58, down from its 52-week high of $124.90. Does this recent pullback indicate a buying opportunity? Let us evaluate the pros and cons of ITRI and decide the best course of action for your portfolio.

Growth Drivers

Momentum in 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 stated that automation of water infrastructure, safety applications for gas customers and the digitalization of its operations were other growth drivers. Management noted that customers are increasingly deploying new digital technology and non-wires grid solutions. This represents a strong opportunity for Itron. The company’s edge intelligent solutions are witnessing increasing uptake.

Also, the acquisition of Elpis Squared expands Grid Edge Intelligence platform solutions. Increased demand for electric vehicles and distributed energy resources is likely to drive customer bookings. Itron’s bookings were $487 million and its backlog amounted to $4 billion at the end of the reported quarter. Bookings in the third quarter included notable utility players like Arkansas Valley Electric Cooperative, CenterPoint Energy and Duke Energy. 
These bookings involve the uptake of Itron’s GenX technology, advanced grid intelligence and smart energy solutions, solidifying its competitive position in the expanding utility market. This substantial backlog provides visibility into Itron’s revenue prospects.

Itron, Inc. Price and Consensus

Itron, Inc. price-consensus-chart | Itron, Inc. Quote

Moreover, steady overall market demand remains a growth driver for Itron. Revenues expanded 10% year over year in the last reported quarter, led by demand and strong operational execution amid a challenging macroeconomic environment.

Itron Outlook Shows Promise

Strong demand trends, effective operational performance and the schedule of customer shipments led to an increase in revenue guidance for full-year 2024. Management now projects revenues to be between $2.428 billion and $2.438 billion compared with guidance of $2.385 to $2.415 billion given in July 2024.
Higher revenues are expected to boost earnings as well. Non-GAAP earnings per share (EPS) are currently estimated in the $5.28-$5.38 band compared with $4.45-$4.65 projected in July 2024.

With a VGM Score of A, the stock has a long-term earnings growth expectation of 25%. Itron delivered an earnings surprise of 49.69%, on average, in the trailing four quarters. The company has an average brokerage recommendation (ABR) of 1.57 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock.

Backed by strong fundamentals, this Zacks Rank #2 (Buy) stock appears primed for further appreciation.

Other Stocks to Consider

Some other top-ranked stocks from the broader technology space are Ubiquiti Inc. UI, InterDigital, Inc. IDCC and RADCOM Ltd. RDCM. UI and IDCC presently sport a Zacks Rank #1 (Strong Buy), whereas RDCM carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ubiquiti’s fiscal 2025 EPS is pegged at $7.30. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its shares have surged 155.2% in the past year.

The Zacks Consensus Estimate for InterDigital’s 2024 EPS is pegged at $15.19, unchanged in the past 30 days. IDCC earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 163.7%. The company’s long-term earnings growth rate is 15%. Its shares have jumped 63.3% in the past six months.

The Zacks Consensus Estimate for RADCOM’ 2024 EPS is pegged at 80 cents, unchanged in the past seven days. RDCM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 25.36%. Its shares have surged 53.9% in the past year.

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