Itron, Inc. (ITRI): what the price requires
At today's price, Itron, Inc. (ITRI) is priced for +0.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ITRI
Headline
| Field | Value |
|---|---|
| Ticker | ITRI |
| Company | Itron, Inc. |
| Current price | $83.23/sh |
| Composition | Product revenues 85% / Service revenues 15% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 4.0% |
| Operating margin today | 12.7% |
| Margin compression implied | -8.7pp |
| Implied growth | 0.2% |
| Multiple paid | 15x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.6pp.
Reconcile: at the x-ray's 9.3% required return this reads ~8.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.11σ |
| cohort percentile (of 177 peers) | 21 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.18x | 5 | expensive |
| Earnings | 1.23x | 5 | expensive |
| Relative | 0.72x | 5 | justifies |
| Growth | 0.91x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $95.85 | 0.87x | yes | FCF base $0.4B, growth -4% (input: historical growth), terminal g 0.5%, WACC 6.6%, 5yr projection |
| DCF Exit Multiple | Growth | $91.27 | 0.91x | yes | Exit EV/EBITDA: 11.0x / 13.0x / 15.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $94.12 | 0.88x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $68.72 | 1.21x | yes | BV/sh $35.35, ROE (TTM) 18.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $94.61 | 0.88x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $42.92 | 1.94x | yes | Rev $2.3B, growth -4% (input: historical growth; tapered), Terminal P/S: 1.4x / 1.6x / 1.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $116.25 | 0.72x | yes | EPS $6.26, growth 19% (input: historical EPS growth), PEG=0.70 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $17.99 | 4.63x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.15B × (1−20%) / WACC 6.6% → EPV (no growth) |
| Residual Income | Asset | $94.05 | 0.88x | yes | BV $35.35 + 5yr PV of (ROE (TTM) 18.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $70.56 | 1.18x | yes | √(22.5 × EPS $6.26 × BVPS $35.35) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $75.56 | 1.10x | yes | EBITDA $0.36B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $74.25 | 1.12x | yes | FCF $394.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $58.57 | 1.42x | yes | SBC-adj FCF $0.33B (FCF $0.39B − SBC $0.07B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $201.99 | 0.41x | yes | EPS $6.26 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $11.59 | 7.18x | yes | BV $35.35 × (ROIC 2.2% / WACC 6.6%) |
| P/Sales Sector | Relative | $129.04 | 0.64x | yes | Revenue $2.35B × sector P/S 2.5x |
| PEG Fair Value | Relative | $174.37 | 0.48x | yes | EPS $6.26 × (PEG 1.5 × growth 18.6% (input: historical EPS growth)) → PE 27.9x |
| Earnings Yield | Earnings | $67.68 | 1.23x | yes | EPS $6.26 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $897.1m |
| Net debt / NOPAT (after-tax) | 3.73x |
| Net debt / operating income (pre-tax) | 2.97x |
| Interest coverage | 13.3x |
| Share count CAGR (dilution) | 0.1% |
| Burning cash | no |
Bullet Takeaways
- Itron makes the metering and grid-edge hardware and software that utilities use to run their networks, spanning "data management, grid planning and operations, AMI operations, gas distribution safety, non-revenue water reduction" and distributed energy management.
- The most decisive number is backlog: it sits around $4.4 billion against roughly $2.4 billion of annual revenue, with bookings of $476 million in the first quarter and a pipeline management calls near all-time highs.
- At $80.84 the price implies essentially flat operating income, a low bar for a company sitting on nearly two years of revenue in backlog, which is why the valuation methods cluster around the price rather than above it.
Bull Case
The one number that anchors the whole Itron thesis is backlog, and at roughly $4.4 billion it is the metric that, if it held, would make almost everything else fall into place. That backlog is close to twice annual revenue, and the company added $476 million of fresh bookings in the first quarter while describing its pipeline as at or near all-time highs. For a hardware-and-software business serving utilities, a backlog of that size is a multi-year revenue floor. The 10-K is careful to note that backlog converts based on "actual currency rates at the time of shipment, availability of critical supply components, and adjusted customer project timing," but the timing is the variable, not the existence of the demand.
The earnings power behind that backlog has improved sharply. Gross margin expanded year over year as older, pre-inflation fixed-price contracts rolled off and mix shifted toward higher-value distributed-intelligence and software offerings. First-quarter revenue of $587 million, adjusted EBITDA of $92 million, and EPS of $1.49 all beat expectations, with EPS well ahead of the roughly $1.23 consensus. The strategic direction is toward stickier revenue: programs like the grid-visibility deployment with Duquesne Light combine smart devices, software, and communications into integrated solutions, exactly the recurring, outcome-based model the company points to when it describes services from "data management, grid planning and operations, AMI operations" to non-revenue water reduction.
The valuation supports patience rather than demanding heroics. The methods cluster tightly around the current price: the perpetual-growth DCF near $97, residual income and the two-stage excess-return method both near $94, and relative valuation near $94, so the blended X-ray figure sits modestly above the price even before crediting the backlog tailwind. The balance sheet is sound, with net debt under three times operating income and interest coverage above thirteen times. The secular driver is grid modernization, the AMI replacement cycle, and the build-out of distributed energy resources, all of which require the metering and edge infrastructure Itron sells. The bull case is straightforward: a company with two years of revenue already booked, improving margins, and a strong balance sheet, trading at a price that asks for no growth at all.
Bear Case
The uncomfortable truth about Itron is that its growth is lumpy and timing-driven in a way the backlog headline can obscure. Revenue here arrives when utilities deploy networks, and deployments slip, get rescheduled, and bunch up. Management's own outlook for the second quarter and the full year points to sequential and year-over-year declines in revenue and earnings, driven by the timing of network deployments and lower interest income, even as it reiterated the $2.35 billion to $2.45 billion full-year revenue range. A backlog that converts on the customer's schedule rather than Itron's means the near-term numbers can go backwards while the long-term story stays intact, and the market does not always wait patiently through that.
Only after that qualitative point does the demand sensitivity bite. Itron's customers are utilities and municipalities whose spending depends on rate-case approvals, government subsidies, and capital availability, and the 10-K lists the risks plainly, citing "economic downturns, slowdowns in new residential and commercial construction, customers' access to capital, the timing and availability of government subsidies." The backlog also has supply-chain exposure baked in: the filing notes conversion depends on "availability of critical supply components," so a renewed component shortage would both delay revenue and pressure margins on fixed-price contracts. The recent margin improvement came partly from older contracts rolling off, a one-time tailwind that does not repeat.
The valuation leaves modest room for disappointment. A meaningful chunk of recent profit also came from interest income on cash, which management flagged as fading, so reported earnings face a non-operating headwind independent of the business. Itron carries about $900 million of net debt, comfortable but real. The bear case is not that the company is broken, it is that a fairly-priced, timing-driven business with declining near-term guidance and a non-repeating margin tailwind offers little protection if a few deployments slip into next year.
Valuation
Itron prices like a fairly-valued compounder rather than a bargain or a bet. At $80.84 the inversion implies operating income roughly flat from here, essentially zero growth, which is a low bar for a business sitting on $4.4 billion of backlog against $2.4 billion of annual revenue. That low implied bar is why the framework reads the price as value and asset-supported rather than a growth wager, with multiple families of method landing right around the current level.
The methods cluster, which tells you the disagreement is small. The perpetual-growth DCF lands near $97, relative valuation near $94, residual income near $94, and the two-stage excess-return method near $95, so the blended X-ray figure of about $94 sits modestly above the price. The outliers are informative but not load-bearing: the zero-growth earnings-power value is far below because it ignores the backlog and the margin recovery, while the forward price-to-sales and PEG methods reach much higher because they extrapolate growth the company is not currently guiding to. The honest center of the distribution is a fair value modestly above the price, with the backlog providing the case for the upper half of the range if conversion holds.
The balance sheet supports the patient read. Itron carries about $900 million of net debt against $713 million of liquid assets, net debt is under three times operating income, and interest coverage sits above thirteen times, so there is no solvency question. The free cash flow of $79 million in the quarter funds the business comfortably. The valuation verdict is that Itron is priced about right on today's numbers, with the embedded backlog and improving mix offering a realistic path to the upper end of the fair-value range, and the timing of deployments plus the fading interest-income tailwind representing the main risks to getting there.
Catalysts
Itron's first quarter of 2026 beat on the headline but the stock dipped, which captures the tension. Revenue of $587 million, adjusted EBITDA of $92 million, free cash flow of $79 million, and EPS of $1.49 all came in ahead of expectations, with EPS well above the roughly $1.23 consensus and gross margin up sharply year over year on better mix and the fading impact of older pre-inflation contracts. Bookings were $476 million and backlog reached $4.4 billion, with management calling the pipeline at or near all-time highs and highlighting a grid-visibility program with Duquesne Light Company.
The catalyst tension is the forward guidance. Management reiterated full-year revenue of $2.35 billion to $2.45 billion but guided the second quarter and the rest of the year to sequential and year-over-year declines, driven by the timing of network deployments and lower interest income. The concrete events to watch are the pace of backlog conversion over the next two quarters, whether bookings stay near record levels, and any new large smart-grid or smart-water wins, with the company recently securing a sizable Auckland smart-water-meter deal as an example of the pipeline at work. The question that resolves the stock is whether backlog converts on schedule and the margin gains stick, or whether deployment timing keeps pushing revenue and earnings to the right.
Peer Cohorts (Per Segment, With Filing Citations)
Device Solutions (reported)
- BMI (BADGER METER, INC.)
- (no filing in the citation store)
- VNT (Vontier Corporation)
- (no filing in the citation store)
- MIR (Mirion Technologies, Inc.)
- (no filing in the citation store)
Networked Solutions / Outcomes / Resiliency Solutions (reported)
- BMI (BADGER METER, INC.)
- (no filing in the citation store)
- VNT (Vontier Corporation)
- (no filing in the citation store)
- TRMB (TRIMBLE INC.)
- (no filing in the citation store)
- ROK (Rockwell Automation, Inc.)
- (no filing in the citation store)
- FTV (Fortive Corp)
- (no filing in the citation store)
- ST (SENSATA TECHNOLOGIES HOLDING PLC)
- (no filing in the citation store)
- MKSI (MKS INC)
- (no filing in the citation store)
- ONTO (ONTO INNOVATION INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Itron Q1 2026 earnings, Motley Fool / AOL, April 2026 · Itron Q1 2026 earnings, AOL, April 2026 · Itron Q1 2026 earnings, Investing.com, April 2026 · Itron Q1 2026 earnings, Motley Fool, April 2026 · Itron Q1 2026 earnings, Investing.com / Motley Fool, April 2026