Itron's 10% Share Plunge and 301% Trading Volume Spike Highlight High-Volume Momentum Strategy's 166% Return

Itron (NASDAQ:ITRI) reported a 10.03% share price decline on July 31, 2025, amid mixed Q2 results despite beating non-GAAP earnings estimates. The stock traded at $137.66 post-earnings, with a $6.31 billion market cap and $0.40 billion in trading volume—a 301% surge from the prior day. Revenue came in at $606.8 million, matching analyst expectations but flat year-over-year. While adjusted EPS of $1.62 exceeded forecasts by 21.6%, full-year revenue guidance of $2.38 billion fell short of the $2.46 billion consensus. Management highlighted improved operating margins (12.6% vs. 10.6% in the prior year) and a 14.9% free cash flow margin, up from 7.3%.

Segment performance revealed divergent trends. Product revenue (85.2% of total) grew at a 15.2% annualized rate over two years but declined 0.4% in Q2. Service revenue (14.8% of total) expanded 4.9% annually but posted a 3% year-over-year drop in total product revenue. Management cut near-term guidance, forecasting a 6.2% sales decline in the next quarter. Analysts now project 3.6% revenue growth over the next 12 months, a slowdown from the 12.7% two-year rate.

The earnings beat was driven by cost discipline, with operating margins rising 200 basis points year-over-year. However, weak forward guidance and a below-estimate next-quarter revenue forecast of $577.5 million (7.5% below expectations) weighed on sentiment. CEO Tom Deitrich emphasized "record margins and cash flow," but the stock underperformed broader market benchmarks, down 27.5% year-to-date versus the S&P 500’s 8.2% gain. Analysts at Zacks assigned a "Hold" rating, citing mixed estimate revisions and an industry rank in the bottom 13% of 250+ sectors.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to July 30, 2025. This outperformed the benchmark return of 29.18%, generating an excess return of 137.53%. The approach's success is attributed to capturing market momentum while managing risk, with consistent high returns observed across varying market conditions.