Itron (ITRI): Reconciling Bullish Ratings with Market Skepticism in 2026

The question of whether Itron (ITRI) is a compelling buy in 2026 hinges on reconciling its strong earnings trajectory and strategic momentum with persistent market skepticism. While Wall Street analysts have upgraded ITRI to a Zacks Rank #1 (Strong Buy) and assigned an average price target implying 40% upside, the stock has underperformed in the past year amid concerns over revenue growth and competitive pressures. This analysis evaluates ITRI's fundamentals, strategic initiatives, and valuation to determine if the stock's long-term potential justifies its current risks.

Earnings Momentum and Zacks Rank Signal Optimism

Itron's financial performance has been a key driver of its bullish rating. Over the past five years, the company's earnings per share (EPS) have grown at an average annual rate of 68.9%, with trailing twelve months (TTM) EPS reaching $5.66 as of Q3 2025 according to Full Ratio. This outperformance is reflected in consistent quarterly beats: in Q2 and Q3 2025, ITRI exceeded consensus estimates by $0.29 and $0.06, respectively according to Simply Wall St. The Zacks Rank upgrade to #1 underscores its position in the top 5% of stocks for earnings estimate revisions, a metric historically correlated with market-beating returns according to Nasdaq.

The company's revenue growth, while more moderate, has shown resilience. In 2024, ITRI reported $2.44 billion in revenue, a 12.3% year-over-year increase, driven by its Networks and Outcomes segments according to MacroTrends. However, the Device Solutions segment has contracted due to declining demand for legacy electric meters, a challenge that has tempered overall growth expectations according to Public.

Market Skepticism: Execution Risks and Competitive Pressures

Despite these positives, skepticism persists. ITRI's stock has fallen 14.48% over the past year, trading at $98.37 as of late 2025-50.3% below its estimated fair value according to Simply Wall St. Analysts cite several risks:
1. Cyclical Revenue Exposure: Q3 2025 revenue declined 5% year-over-year to $582 million, attributed to timing delays in utility projects and a shift away from older products according to Finimize.
2. Competitive Threats: Rivals like Landis+Gyr and ABB are eroding ITRI's market share in smart metering, while aggressive pricing pressures margins according to Finimize.
3. Short-Interest Volatility: Short interest now accounts for 8.73% of shares, with a days-to-cover ratio of 5.8, signaling bearish sentiment according to Finimize.

Valuation concerns also linger. While ITRI's current P/E ratio of 16.91 is below its 3-year average of 31.28, the forward P/E of 22.11x and EV/Sales multiple of 2.35x suggest the market is pricing in cautious growth expectations according to Full Ratio.

Strategic Initiatives: A Path to Long-Term Resilience

Itron's response to these challenges has been aggressive strategic expansion. In Q4 2025, the company acquired Urbint for $325 million to enhance AI-powered operational resilience solutions according to Nasdaq. This follows the $525 million acquisition of Locusview, set to close in January 2026, which will bolster its digital construction management capabilities according to ITRI's Investor Relations. These moves align with ITRI's broader pivot toward high-margin software and services, as evidenced by a record 37.7% gross margin in Q3 2025 according to DCF Modeling.

The company's Grid Edge Intelligence (GEI) portfolio has also gained traction. Collaborations with NVIDIA and Gordian Technologies have integrated AI and machine learning into utility operations, enabling real-time grid analytics and disaster management according to ITRI's Investor Relations. According to ITRI's 2025 Resourcefulness Report, 81% of North American utilities already use AI, with grid optimization and demand forecasting as top priorities according to ITRI's Investor Relations. This positions ITRI to capitalize on the accelerating digitization of energy infrastructure.

Reconciling the Divergence: Is ITRI a Buy?

The key to ITRI's investment case lies in its ability to execute on its strategic vision while navigating near-term headwinds. Management has raised its 2025 non-GAAP EPS guidance to $6.84–$6.94, reflecting confidence in its software-driven transformation according to DCF Modeling. The $4.3 billion backlog provides a buffer against project timing delays, and the Urbint and Locusview acquisitions could unlock recurring revenue streams according to Nasdaq.

However, execution risks remain. Integrating these acquisitions smoothly will be critical to maintaining margins, and the competitive landscape in smart metering is intensifying. That said, the average price target of $139.00 (41% upside) suggests analysts expect these challenges to be manageable according to MarketBeat.

Conclusion: A High-Conviction Opportunity with Caveats

Itron's Zacks Rank #1 signal and earnings momentum justify a bullish stance, but investors must weigh these against execution risks and valuation concerns. The stock's current discount to historical averages and strategic momentum in AI-driven grid solutions present compelling long-term upside. For those with a 12–18 month horizon, ITRI offers a high-conviction opportunity-if management can deliver on its transformational bets.