A Fresh Look at Itron (ITRI) Valuation Following New Smart Lighting and Utilities Partnerships

There’s been a surge of interest around Itron (ITRI) following its fresh joint marketing agreement with Current Lighting Solutions to roll out smarter, more efficient streetlights for cities and utilities. The partnership focuses on integrating Itron’s intelligent management controls with Current’s advanced LED luminaires, a combination city planners hope will boost safety and slash energy costs. On top of that, Itron just announced a major deal with the American Samoa Power Authority, bringing its smart metering and grid solutions to one of the most remote territories in the Pacific, making waves far beyond its usual markets.

These moves come at a time when Itron's stock is already in growth mode, up 17% over the past year and showing a solid 15% gain year-to-date. Three- and five-year total returns point to strong momentum, and recent partnerships suggest the company is positioned to ride the infrastructure modernization trend. The new alliances with Current and American Samoa highlight both Itron’s innovation and its growing presence in utility technology, even as price action in the past month has leveled out a bit.

So after this year’s impressive run, is Itron trading at a rare discount, or has the market already baked in all that future growth?

Most Popular Narrative: 13.4% Undervalued

The most widely followed narrative sees Itron as notably undervalued. This view is based on rising profit margins, a lower anticipated P/E, and expectations for strong future growth driven by structural changes and global demand.

Ongoing industry-wide digitalization and increased adoption of IoT by utilities are driving higher uptake of Itron's Outcomes (software and analytics) offerings. These offerings have higher margins and boost recurring revenue, supporting continued net margin and earnings expansion.

Want to uncover what’s fueling this bullish outlook? The narrative’s fair value is anchored on ambitious profit expansion and bold valuation assumptions that you might not expect outside of top growth tech stocks. Curious how much future growth and earnings power analysts are including in their target? Discover the numbers that shape this surprisingly optimistic price estimate.

Result: Fair Value of $144.40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory delays and slower smart grid project rollouts could hamper Itron’s growth and potentially test the optimism behind that bullish valuation target.

Find out about the key risks to this Itron narrative.

Another View: What Does Our DCF Model Say?

While analyst price targets point to Itron being undervalued, our SWS DCF model comes to a similar conclusion. But does this reinforce a compelling value case, or simply echo market optimism? Which view tells the real story?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Itron for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Itron Narrative

If you see things differently or simply want to dig into the numbers on your own terms, you can craft your own take in just a few minutes. Do it your way

A great starting point for your Itron research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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