As the global electricity demand continues to rise, the need for smarter, more efficient grid systems has never been more urgent. Smart grids leverage digital technologies, sensors, and real-time analytics to optimize power distribution, reduce energy waste, and improve grid reliability.
With increasing electrification, urbanization, and renewable energy adoption, the global smart grid market is expected to nearly double from $40.12 billion in 2024 to $77.79 billion by 2030, growing at a CAGR of 11.5%.
Based in Liberty Lake, Washington, Itron, Inc. (ITRI) is at the forefront of this transformation. The company specializes in smart metering solutions that help utilities modernize energy infrastructure, manage demand, and improve grid resilience. From advanced smart meters to grid management software, Itron’s solutions are designed to optimize electricity flow, reduce outages, and support the growing number of distributed energy resources like solar panels and battery storage.
Over the past year, the stock has gained 17.4%, closing the last trading session at $106.89. But can ITRI sustain this momentum? The company’s recent contracts and strategic partnerships suggest that it’s well-positioned to lead the charge in grid modernization.
Let’s take a closer look at how ITRI’s latest initiatives are strengthening its role in the industry.
Itron's Latest Innovations and Strategic Partnerships
On December 19, 2024, ITRI announced a partnership with Xcel Energy to manage the growing number of distributed energy resources (DERs) in Colorado, including residential battery storage. As part of this initiative, Itron will deploy its Aggregator Distributed Energy Resource Management System (DERMS), which enables real-time coordination of DERs directly from customer meters. This marks a step forward in grid flexibility, allowing utilities to manage energy supply and demand better.
In the same month, the company secured a $1.5 billion contract with LUMA to deploy 1.5 million smart meters across Puerto Rico over three years, starting in San Juan. The smart grid platform will enhance energy monitoring, outage restoration, and renewables integration, backed by a 15-year warranty.
This deal offers long-term recurring revenue through maintenance and software services, with 20-30% margins typical of utility upgrades. As Puerto Rico modernizes its grid, Itron could gain further opportunities in the Caribbean.
Further expanding its impact, ITRI partnered with Pacific Gas and Electric (PG&E) on November 13, 2024, to improve access to affordable home EV charging. The collaboration explores innovative ways to manage EV charging loads in real time, reducing the need for costly electrical panel upgrades. This initiative highlights the company’s role in easing the transition to widespread EV adoption while supporting grid stability.
Itron also launched its Grid Edge Essentials solution on October 7, 2024, a real-time, pre-integrated platform designed to tackle challenges like aging infrastructure, extreme weather, and increasing grid complexity. By optimizing existing grid assets, this system could enhance grid capacity by up to 20%, providing utilities with high-resolution data at every endpoint.
Through these initiatives, the company continues to lead the way in grid modernization and energy intelligence, ensuring that utilities are equipped for a more sustainable and resilient energy future.
Strong Financials
For the fiscal fourth quarter (ended December 31, 2024), ITRI’s total revenues grew 6.2% year-over-year to $612.86 million. Its gross profit increased 8.9% from the year-ago value to $213.88 million. Its operating income also saw a 27.3% uptick, from $49.27 million last year to $62.73 million.
The company’s adjusted EBITDA rose 19.1% from the prior-year quarter to $81.41 million. Likewise, its non-GAAP net income and non-GAAP EPS amounted to $62.16 million and $1.35, reflecting an increase of 9.6% and 9.8% year-over-year, respectively. In addition, its free cash flow of $70.17 million improved by 78.4% from the year-ago value of $39.31 million.
Favorable Analyst Estimates
The consensus revenue estimate of $608.86 million for the fiscal first quarter (ending March 2025) represents a marginal increase year-over-year. The consensus EPS estimate of $1.32 for the current quarter indicates a 6.8% improvement year-over-year. The company has an impressive surprise history, surpassing the consensus revenue and EPS estimates in three of the trailing four quarters.
For the fiscal year ending December 2025, the company’s revenue is anticipated to grow marginally year-over-year to $2.47 billion, while its EPS is expected to come in at $5.40.
In addition, Street expects its revenue and EPS for the fiscal year 2026 to grow 5.5% and 10.8% from the same period last year to $2.60 billion and $5.98, respectively.
Lower-Than-Industry Valuation
In terms of forward non-GAAP P/E, ITRI is currently trading at 19.96x, 15.4% lower than the industry average of 23.58x. Moreover, the stock’s forward EV/Sales and EV/EBIT multiples of 2.08 and 17.56 are 31.4% and 11.8% lower than the industry averages of 3.03x and 19.90x, respectively.
Outstanding Profitability
In terms of the trailing-12-month EBIT margin, ITRI’s 10.86% is 95.3% higher than the 5.56% industry average. Likewise, its 9.80% trailing-12-month net income margin is 156% higher than the industry average of 3.83%.
ITRI’s trailing-12-month ROCE and ROTA of 17.70% and 7.02% compare favorably to their respective industry averages of 4.55% and 2.06%. Moreover, its trailing-12-month asset turnover ratio of 0.81x exceeds the sector’s average of 0.60x by 36.3%.
POWR Ratings Exhibit Solid Prospects
ITRI’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our proprietary rating system. The POWR Ratings are calculated by accounting for 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. ITRI also has a B grade for Sentiment, which syncs with its optimistic analyst estimate. Moreover, its high-profit margins justify the stock’s B grade for Quality.
Within the A-rated Industrial - Services industry, ITRI is ranked #11 out of the 77 stocks.
Beyond what we’ve stated above, we have also rated the stock for Growth, Value, Momentum, and Stability. Get all ITRI ratings here.
Bottom Line
As the global energy landscape shifts toward smarter, more efficient grids, ITRI stands out with its innovative technology, strategic contracts, and growing market influence. The company’s ability to modernize energy infrastructure while maintaining strong financials and profitability gives it a competitive edge.
Given the increasing demand for grid resilience and sustainable energy solutions, ITRI’s continued expansion could unlock significant long-term value for investors seeking exposure to this rapidly evolving sector.
How Does Itron, Inc. (ITRI) Stack Up Against Its Peers?
While ITRI has an overall POWR Rating of B, investors could also check out these other stocks within the A-rated Industrial - Services industry with A (Strong Buy) ratings: Keller Group plc (KLRGF), PARK24 Co., Ltd. (PKCOY), and PT United Tractors Tbk (PUTKY).
To explore more A- and B-rated Industrial - Services stocks, click here.
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ITRI shares were unchanged in premarket trading Friday. Year-to-date, ITRI has declined -1.56%, versus a -0.18% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
Is Itron Inc. (ITRI) Leading the Charge in Smart Grid Technology? StockNews.com
