Itron, Inc.: Bullish Utilities Tech Stock Up 60% in 2019, Just Stretching Its Legs

Itron, Inc. 60% Gains in 2019 But Still Bullish on Raised Guidance
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Itron, Inc. Extends Recent Gains, Hits New 52-Week High

Shares of Itron, Inc. (NASDAQ:ITRI) have been on a fabulous trajectory since the start of April, advancing approximately 60%. ITRI stock has been juiced by strong back-to-back financial results.

In early August, Itron reported strong second-quarter results and increased its full-year guidance. Investors like the company’s outlook for the second half of 2019 and have continued to lift Itron stock higher. Since the company announced its second-quarter results on August 5, its share price has increased 30%, hitting a new 52-week high of $75.65 on September 17.

Despite the strong market-trouncing gains already made in 2019, Itron stock still has lots of room to run this year.

ITRI Stock Overview

Fire and water.

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Managing and sustaining our natural resources may be one of the greatest challenges of the 21st century. According to a recent study by Itron, 50% of consumers believe their utilities are wasteful. The same percentage of utility executives think their utilities are running inefficiently. (Source: “2018 Itron Resourcefulness Report,” Itron, Inc., last accessed September 18, 2019.)

Who is best equipped to deal with this issue? Consumers say it’s up to utilities to improve their resourcefulness. That’s where Itron comes in; it provides technology to measure, analyze, and manage energy and water usage around the globe.

In North America, the company is known as Itron. Outside North America, the company is called Actaris Metering Systems.

As the world’s leading provider of metering, data collection, and software solutions, the Liberty Lake, Washington-based company helps more than 8,000 utilities in more than 100 countries to optimize the delivery and use of water and energy. (Source: “Itron Fact Sheet,” Itron, Inc., last accessed September 18, 2019.)

In addition to meters, data collection, communication systems, and meter data management, Itron provides project management, installation, and consulting services.

ITRI Stock Information

Market Cap $3.0 Billion
52-Week High $75.68
52-Week Low $44.35
Shares Outstanding 39.5 Million
Float 36.9 Million
50-Day Moving Average $68.44
200-Day Moving Average $58.77

(Source: “Itron, Inc. (ITRI),” Yahoo! Finance, last accessed September 18, 2019.)

Itron stock enjoyed a strong run in the opening months of 2019, fueled by the “January Effect” on steroids. That streak came to an end in late February, when the company provided a less-than-enthralling outlook for 2019.

Still, the stock rebounded, soaring higher in early May on strong first-quarter results, and again in mid-August on strong second-quarter results and increased guidance.

The next few weeks could be telling for ITRI stock as it approaches resistance levels near $77.00 and $80.00.


Chart courtesy of StockCharts.com

Strong Q2 Results and Higher 2019 Revenue and Earnings Guidance

On August 5, Itron announced that its revenue for the second quarter of 2019 increased eight percent year-over-year to $635.0 million. If you exclude the impact of changes in foreign currency exchange rates, second-quarter revenue actually expanded by 11%. (Source: “Itron Announces Second Quarter 2019 Financial Results and Increases Full-Year 2019 Guidance,” Itron, Inc., August 5, 2019.)

The company reported second-quarter net income of $19.0 million ($0.49 per share), up significantly from $3.0 million ($0.07 per share) in the same period last year. The big increase was boosted by higher operating income and a lower effective tax rate.

Non-generally accepted accounting principles (GAAP) net income was $35.0 million ($0.87 per share), a 75% improvement from the non-GAAP net income of $20.0 million ($0.51 per share) last year.

Strong results in the first half of 2019 allowed Itron to increase its revenue and non-GAAP earnings per share (EPS) outlook for the remainder of the year.

For fiscal 2019, Itron expects total revenue of between $2.45 and $2.5 billion, up from previous guidance of $2.35 and $2.45 billion. In 2018, Itron reported full-year revenue of $2.4 billion.

The company’s non-GAAP EPS is forecast to be between $2.80 and $3.00, up from previous guidance of $2.35 and $2.75. In 2018, the company reported non-GAAP EPS of $2.65.

Analyst Take

Itron stock continues to trend steadily higher, notching up new 52-week highs. That momentum isn’t being fueled just by broader investor sentiment.

Itron, Inc. has been reporting strong financial results, driven by strong customer demand. That’s s why the company was able to raise its revenue and non-GAAP EPS for fiscal 2019. The optimism about the company’s operations should help propel ITRI stock higher over the coming quarters.