Itron Has Been Hammered On Disappointing Results And Investor Rotation

From time to time I like to address investment philosophies that are repeated virtually to the point of cliché, and that brings me to Itron (NASDAQ:ITRI) and "buy the dip". As I've said in the past, while buying the dips in good companies with strong long-term prospects can generate excellent returns, it can be tough to discern what's really a dip (a temporary recoverable issue) and what's the first stumble down a longer staircase.

Itron shares have gotten hammered since my last update, falling over 40% as the company has seen significant hits to the business from supply chain issues and demand disruptions. At the same time, though, the Device Solutions has structural issues that won't vanish quickly and there are large players in the company's more attractive markets to challenge their share/revenue growth in the coming years.

I've cut back my modeling assumptions substantially since my last update, and as much as I'm concerned that I'm getting pulled into a bull trap, long-term core revenue and FCF growth of 3% and 10% from the 2019 peak can still support an attractive return from here.

 

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Itron Has Been Hammered On Disappointing Results And Investor Rotation