Itron (ITRI) 52-week high. Can growth continue?

Have you been paying attention to Itron (ITRI) stock? The stock has been rising in price over the past month, with its value up 1.1%. In the previous session, the company’s shares hit a new 52-week high of $81.4. Itron has gained 71.7% year-to-date compared to the 27.5% gain in the Zacks Computer and Technology sector and the 25.6% return in the Zacks Electronics – Test Equipment industry.

What is driving better results?

The stock has an impressive record of positive earnings surprises, as it hasn’t topped our consensus earnings estimate in any of the last four quarters. In its last earnings report on November 4, 2019, Itron reported EPS of $1.04 compared to the consensus estimate of $0.67, while beating consensus revenue estimates by 0.88%.

For the current fiscal year, Itron expects earnings of $3.09 per share on revenue of $2.47 billion. This represents a 16.6% change in EPS with a 4% change in revenue. For the next fiscal year, the company expects earnings of $3.58 per share on revenue of $2.52 billion. This represents a year-on-year change of 15.79% and 2.12%, respectively.

Valuation metrics

Itron may be at a 52-week high right now, but what could the future hold for the stock? A key aspect of this question is to look at valuation metrics to determine whether the company is ready to exit this level.

In this context, we can look at Zacks Style Scores because they give investors different ways to view a stock (beyond checking a security’s Zacks Rank). These styles are represented by grades from A to F in the Value, Growth and Momentum categories, but there is also a composite VGM Score. Investors should find style scores to be a valuable tool that can help them select the most appropriate Zacks Rank stocks based on their individual investing style.

Itron has a Value Score of C. The stock’s Growth and Momentum Score are B and A, respectively, giving the company a VGM Score of B.

In terms of value split, the company’s stock is currently trading at 26.3 times EPS estimates for the current fiscal year. On a trailing cash flow basis, the stock is currently valued at 13.6X compared to the peer group average of 20.2X. Additionally, the company’s shares have a PEG ratio of 1.05. This is not enough to put the company at the top of all the companies we analyze from a value perspective.

Zack Rank

We also need to look at the Zacks Rank for the stock as it overrides any trends on the Style Score front. Fortunately, Itron currently sports a Zacks Rank of #2 (Buy) on the back of rising earnings estimates.

Since we recommend investors select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, Itron appears to tick the box. So it looks like Itron stock may have a little more room to grow in the short term.

How does Itron compare to the competition?

Itron’s shares are rising and the company still seems to be a good choice, but what about the rest of the industry? Some of its industry peers are also solid prospects, including AMETEK (AME), Arrow Electronics (ARW), and KLA (KLAC), all of which currently sport a Zacks Rank of at least #2 and a VGM Score of at least B. , which makes them the right choices.

The Zacks Industry Rank is in the top 17% of all industries we have in our universe, so it looks like Itron has good prospects even beyond its own solid fundamentals.

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