Is ITRI a good stock to buy? We came 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.’s share was trading at $94.16 as of April 21st. ITRI’s trailing and forward P/E were 15.02 and 16.08 respectively according to Yahoo Finance.
Suwin/Shutterstock.com
Itron, Inc., a technology, solutions, and service company, provides end-to-end solutions that help manage energy, water, and smart city operations worldwide. ITRI is being mispriced by the market as a predominantly hardware utility infrastructure company, despite housing a rapidly scaling software and outcomes business that is increasingly driving its fundamental re-rating potential.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
Within Itron sits an approximately $368M annual recurring revenue (ARR) software layer, growing 20% year-over-year, alongside an Outcomes segment generating roughly $360M of recurring revenue with 22% growth and ~41.7% adjusted gross margins.
A newly formed Resiliency Solutions segment, including Urbint and Locusview, further strengthens the profile with ~76% gross margins in its early contribution phase. Despite this high-quality, fast-growing recurring revenue base, the market implicitly values Itron’s combined software layer at roughly 8× ARR, a level materially below comparable software peers.
Based on a ~$5.1B enterprise value and conservative hardware valuation assumptions, the implied software valuation ranges between 7×–10× ARR, still significantly lagging infrastructure software companies such as Samsara trading above 15× ARR and historical leaders like Veeva Systems, which reached much higher multiples during comparable growth phases.
The mispricing persists due to delayed adoption of ARR as a formal reporting metric, limited analyst model restructuring, and the absence of a clean separation of software economics in consensus frameworks. Structurally, this is compounded by the recent emergence of Resiliency Solutions and the cross-sell opportunity into Itron’s 8,000+ utility customer base, enabling low-cost revenue expansion at scale.
Fundamentally, demand is non-discretionary and driven by regulated global grid modernization programs across Europe and the UK, ensuring durable visibility and insulation from typical enterprise software cyclicality. With a $1B+ backlog growing 58% year-over-year, accelerating pipeline metrics, and consistent earnings beats, Itron is positioned for a material re-rating.