On Aug 23, we issued an updated research report on Itron, Inc. (ITRI - Free Report) . The company is likely to benefit from consistent focus on expanding its portfolio of outcome-based solutions. In addition, the Comverge acquisition, strong bookings, and backlog and new projects are anticipated to stoke growth.
Notably, Itron closed the acquisition of Comverge in June 2017. Following the Comverge acquisition, demand response in energy management solutions fit very well within Itron. Combining these solutions under the Itron brand will simplify customer sales, service and deployment, as well as expand the portfolio of outcome-based services. Though the Comverge buyout will have not have a material effect on earnings per share in 2017, it will be fully accretive in 2018.
Further, Itron continues to focus on expanding its portfolio of outcome-based solutions aimed at higher growth opportunities by utilizing the power of the OpenWay Riva platform. This platform will significantly transform the company’s distributed energy management.
The company is also designing other outcome-based services on the Riva platform and engaging with the developer community through Itronriva.com and Itron Idea Labs. Itron's organic R&D projects, partnering with third-party developers and selective M&A establish its strategy to deliver even more value to customers and increase the contribution of outcome-based services.
Again, there is around $350 million worth of business awarded, which is not yet included in Itron’s backlog, reflecting ample prospects for the company. In addition, there is a solid pipeline of Itron’s Water business for the next 12 months, including large projects in the Americas, Europe and the Middle East, which are anticipated to drive top-line growth in this line.
In a year’s time Itron has outperformed the industry it belongs to. The company’s shares have gained around 46.7% compared with 39.7% growth recorded by the industry. Furthermore, the projected earnings growth rate of the stock for this year is 19.88%, higher than the industry's 16.92% growth expectation. This Zacks Rank #2 (Buy) stock currently carries a VGM score 'B.'
In addition, the company’s earnings estimate for 2017 inched up to $3.05 per share from $2.99 over 30 days. Itron posted an average positive earnings surprise of 14.8% over the trailing four quarters.
Other Key Picks
Other top-ranked stocks in the same space include Cognex Corporation (CGNX - Free Report) , Fortive Corporation (FTV - Free Report) and AMETEK, Inc. (AME - Free Report) . Cognex sports a Zacks Rank #1 (Strong Buy), while Fortive and AMETEK carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cognex Corporation has an average positive earnings surprise of 40.42% for the last four quarters. Fortiv delivered an average positive earnings surprise of 5.80% in the trailing four quarters. AMETEK’s average positive earnings surprise is 2.98% for the same time frame.
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