Itron (ITRI) Stock Up 33.1% in a Year: Will the Rally Continue?

Core Viewpoint - Itron's shares have shown strong performance with a year-to-date gain of 33.1%, significantly outperforming the S&P 500 and its sub-industry, indicating potential for further upside as the stock is down 16.4% from its 52-week high [1][2] Company Overview - Itron, headquartered in Liberty Lake, WA, is a leading global supplier of various types of meters and communication systems for managing electricity, gas, and water resources [2] - The company has a Zacks Rank 2 (Buy) and a Growth Score of B, suggesting it is a solid investment option [3] Financial Performance - In Q2 2024, Itron reported revenues of $609 million, exceeding the Zacks Consensus Estimate of $600 million, with a year-over-year growth of 13% [4] - The company's bookings were $447 million, and its backlog reached $4.1 billion at the end of the reported quarter [4] Revenue Breakdown - Networked Solutions generated revenues of $412.7 million (67.8% of total), up 14% year-over-year, while Outcomes' revenues were $77.8 million (12.8%), increasing 16% year-over-year [5] Growth Drivers - The Grid Edge Intelligence platform is experiencing momentum due to factors like data center demand, reindustrialization, and electrification trends [6] - The acquisition of Elpis Squared has expanded the platform's solutions, presenting strong opportunities for Itron [7] Future Outlook - Itron anticipates a book-to-bill ratio of at least 1:1 for 2024 and expects Q3 2024 revenues between $590 million and $600 million [8] - The company has revised its full-year revenue outlook for 2024 to between $2.385 billion and $2.415 billion, up from previous guidance [9] Earnings Estimates - The Zacks Consensus Estimate for Itron's 2024 and 2025 revenues is $2.41 billion and $2.5 billion, indicating growth of 10.8% and 3.8% respectively [10] - EPS estimates for 2024 and 2025 are expected to rise 33.3% and 3.6% from prior-year actuals [10] Long-term Growth - Itron's long-term earnings growth rate is projected at 26% [11] Challenges - Rising operating expenses and competition in a soft macroeconomic environment are concerns, with non-GAAP operating expenses increasing by 6.6% year-over-year in Q2 2024 [12] - The company has a leveraged balance sheet, with cash and cash equivalents of $920.6 million and long-term debt of $1.24 billion as of June 30, 2024 [13]