Is ITRI a good stock to buy? We come across a bullish thesis on Itron, Inc. on Darren Leung’s Substack. In this article we will summarize the bulls’ thesis on ITRI. Itron, Inc. shares were trading at $94.16 on April 21. ITRI’s trailing and forward P/E was 15.02 and 16.08 respectively, according to Yahoo Finance.
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Itron, Inc., a technology, solutions and services company, provides comprehensive solutions that help manage energy, water and smart city operations around the world. The market is misvaluing ITRI as a predominantly hardware utility infrastructure company, despite hosting a rapidly expanding software and results business that is increasingly driving its fundamental rerating potential.
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Within Itron is an annual recurring revenue (ARR) software layer of approximately $368 million, growing 20% ​​year over year, along with a Results segment generating approximately $360 million of recurring revenue with 22% growth and adjusted gross margins of ~41.7%.
A newly formed Resilience Solutions segment, including Urbint and Locusview, further strengthens the profile with ~76% gross margins in its initial contribution phase. Despite this high-quality and rapidly growing recurring revenue base, the market implicitly values ​​Itron’s combined software layer at approximately 8x ARR, materially lower than its comparable software peers.
Based on an enterprise value of ~$5.1 billion and conservative hardware valuation assumptions, the software’s implied valuation ranges from 7x to 10x ARR, which remains significantly behind infrastructure software companies like Samsara that trade above 15x ARR and historical leaders like Veeva Systems, which achieved much higher multiples during comparable growth phases.
Poor pricing persists due to the delay in adoption of ARR as a formal reporting metric, limited restructuring of the analyst model, and lack of clear separation of software economics in consensus frameworks. Structurally, this is compounded by the recent emergence of Resiliency Solutions and the opportunity to cross-sell into Itron’s 8,000+ utility customer base, enabling low-cost revenue expansion at scale.
Crucially, demand is non-discretionary and driven by regulated global network modernization programs in Europe and the UK, ensuring long-lasting visibility and insulation from the cyclicality typical of enterprise software. With a $1 billion+ backlog growing 58% year over year, accelerating pipeline metrics and consistently outperforming earnings, Itron is positioned for a significant re-rating.