Itron, Inc. (ITRI - Free Report) recently announced its intention to offer $400 million aggregate convertible senior notes due 2026. The interest rate and other terms of the notes are yet to be determined. The offering is subject to market and other conditions.
The notes will be offered to qualified institutional buyers only and in accordance with Rule 144A under the Securities Act of 1933, as amended. The company intends to give the initial purchasers an option to buy up to an additional $60 million aggregate principal amount of notes.
Cash Position
At the end of fourth-quarter 2020, Itron’s cash and cash equivalents totaled $206.9 million, down from $586.2 million as of Sep 30, 2020. Long-term debt at fourth quarter-end was $902.6 million compared with $1.31 billion at third quarter-end.
Itron generated $38.9 million of cash from operations in the fourth quarter compared with $45 million in the prior quarter.
Moreover, the company generated free cash flow of $29.03 million in the quarter under review compared with $38 million in the third quarter.
In our view, the stock offering is expected to boost financial flexibility and help Itron meet financial obligations in an efficient way. Moreover, the latest move provides it with ample scope to deploy capital for long-term growth opportunities and reward stockholders with higher returns.
Share Price Performance
Itron has returned 36.9% in the past year, underperforming the industry’s 57.9% rally and S&P 500’s rise of 43.8%.
Bottom Line
Its expanding product offerings, end-market strength and robust performance in key markets are growth drivers. The company has been witnessing growing contract wins, which is a positive. Also, Itron’s supply chain optimization strategy is another growth catalyst.
The company remains optimistic about strategic investments and growing footprint in the connected devices space. Further, strengthening momentum across the Riva distributed intelligence platform is likely to continue aiding Itron’s performance.
However, sluggish Device Solutions and Networked Solutions segments remain concerns. Further, manufacturing inefficiencies, sluggish demand environment and operational constraints owing to the ongoing pandemic are woes.
Zacks Rank and Stocks to Consider
Itron currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader computer and technology sector include KLA Corporation (KLAC - Free Report) , TE Connectivity Ltd. (TEL - Free Report) and Mettler-Toledo International, Inc. (MTD - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for KLA, TE Connectivity and Mettler-Toledo are projected at 11.6%, 10.4%, and 13.8%, respectively.
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Itron, Inc. (ITRI - Free Report) recently announced its intention to offer $400 million aggregate convertible senior notes due 2026. The interest rate and other terms of the notes are yet to be determined. The offering is subject to market and other conditions.
The notes will be offered to qualified institutional buyers only and in accordance with Rule 144A under the Securities Act of 1933, as amended. The company intends to give the initial purchasers an option to buy up to an additional $60 million aggregate principal amount of notes.
Cash Position
At the end of fourth-quarter 2020, Itron’s cash and cash equivalents totaled $206.9 million, down from $586.2 million as of Sep 30, 2020. Long-term debt at fourth quarter-end was $902.6 million compared with $1.31 billion at third quarter-end.
Itron generated $38.9 million of cash from operations in the fourth quarter compared with $45 million in the prior quarter.
Moreover, the company generated free cash flow of $29.03 million in the quarter under review compared with $38 million in the third quarter.
In our view, the stock offering is expected to boost financial flexibility and help Itron meet financial obligations in an efficient way. Moreover, the latest move provides it with ample scope to deploy capital for long-term growth opportunities and reward stockholders with higher returns.
Share Price Performance
Itron has returned 36.9% in the past year, underperforming the industry’s 57.9% rally and S&P 500’s rise of 43.8%.
Bottom Line
Its expanding product offerings, end-market strength and robust performance in key markets are growth drivers. The company has been witnessing growing contract wins, which is a positive. Also, Itron’s supply chain optimization strategy is another growth catalyst.
The company remains optimistic about strategic investments and growing footprint in the connected devices space. Further, strengthening momentum across the Riva distributed intelligence platform is likely to continue aiding Itron’s performance.
However, sluggish Device Solutions and Networked Solutions segments remain concerns. Further, manufacturing inefficiencies, sluggish demand environment and operational constraints owing to the ongoing pandemic are woes.
Zacks Rank and Stocks to Consider
Itron currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader computer and technology sector include KLA Corporation (KLAC - Free Report) , TE Connectivity Ltd. (TEL - Free Report) and Mettler-Toledo International, Inc. (MTD - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for KLA, TE Connectivity and Mettler-Toledo are projected at 11.6%, 10.4%, and 13.8%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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