Does Itron’s Recent 200% Rally Still Leave Room for Strong Returns in 2025?

If you are weighing your next move with Itron stock, you are definitely not alone. Over the past three years, Itron has soared by nearly 200%, a remarkable performance that has captured the attention of seasoned investors and new analysts alike. Even just this year, the stock is up 21%, building on an already impressive five-year return of over 80%. With a last close at $131.33, it is no wonder that many are asking whether there is still room for upside, or if the best gains are already behind us.

Much of Itron’s upward momentum reflects growing market optimism around smart grid technologies and infrastructure investment. The recent 7.5% gain in just the past week and an 11.4% jump in the past month reinforce how quickly sentiment can shift as more utilities and cities lean into modernization. But before you make a decision, it is crucial to look past the headlines and focus on valuation. Where is Itron actually trading compared to its intrinsic worth?

Itron currently earns a value score of 5 out of 6, meaning it looks undervalued in five of the key criteria most investors use to assess a stock. This strong score is the kind of signal that gets value-focused investors excited, but even that does not tell the whole story. Next, we will break down what underpins that valuation, examining each analytical approach. At the end of the article, we will introduce a perspective that can help you understand Itron’s value even more clearly than the numbers alone.

Itron delivered 26.0% returns over the last year. See how this stacks up to the rest of the Electronic industry.

Approach 1: Itron Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and then discounting those projections back to today's value. This approach gives investors a sense of what the business is fundamentally worth. For Itron, the model uses a 2 Stage Free Cash Flow to Equity approach, leveraging analyst forecasts for the next five years and then extrapolating further using industry benchmarks.

Itron's latest reported Free Cash Flow is $285.9 million. Analysts predict this will steadily rise, with a projection of $435 million by 2028. Over a 10-year period, this growth continues, with future estimates suggesting free cash flow could reach roughly $647.7 million by 2035, based initially on analyst coverage and then on calculated longer-term growth rates.

After discounting all these future cash flows to present value, the DCF model arrives at an intrinsic value of $176.91 per share compared to the recent share price of $131.33. This indicates the stock is trading at a 25.8% discount, suggesting Itron is materially undervalued at its current price.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Itron.

Our Discounted Cash Flow (DCF) analysis suggests Itron is undervalued by 25.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Itron Price vs Earnings

For a consistently profitable company like Itron, the Price-to-Earnings (PE) ratio is a trusted and widely used valuation measure. This multiple provides a quick sense of how much investors are willing to pay for each dollar of reported earnings. It is a straightforward way to compare companies of different sizes within the same sector.

Reasonable PE ratios depend on expectations for future growth and perceived risk. Higher growth prospects or lower risks typically justify a higher “normal” PE ratio, while slower-growing or riskier companies tend to trade at lower multiples. Looking at Itron, the stock currently trades at a PE ratio of 22.2x. For context, this sits below the electronic industry’s average PE of 26.1x and also below the peer group average of 24.8x. This suggests Itron is valued more conservatively by the market compared to its rivals.

Simply Wall St’s proprietary "Fair Ratio" goes further by assessing what PE multiple Itron truly deserves, factoring in not just industry and size, but tailored attributes like growth trajectory, profit margins, and risk profile. This approach produces a Fair Ratio of 25.0x for Itron. It offers a more personalized benchmark than simple industry or peer comparisons. Because the current PE of 22.2x is notably lower than its Fair Ratio, the numbers indicate Itron may be undervalued relative to what it deserves, based on its strengths and outlook.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Itron Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative connects a company’s story—what you believe about its opportunities, risks, and growth—directly to your financial expectations, allowing you to turn real-world insights into a custom forecast and fair value. On Simply Wall St’s Community page, millions of investors use Narratives to personalize their investment outlook, simply by combining their assumptions for Itron’s future revenue, earnings, and margins with their take on industry changes and business drivers.

Narratives help you decide when to buy or sell by instantly showing how your Fair Value compares with today’s price. Since they update in real time as new earnings or news emerge, they remain accurate and relevant to your investment thesis. For example, you might see that some investors forecast robust long-run software-driven growth and have built Narratives with a fair value for Itron up to $155.00, while others are more cautious, setting their own fair value closer to $129.00. With Narratives, you are equipped to move beyond averages, make decisions that fit your unique view, and adapt to new information with confidence.

Do you think there's more to the story for Itron? Create your own Narrative to let the Community know!

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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