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Itron, Inc. (ITRI) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Itron, Inc. (ITRI)

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Intrinsic Value (DCF)

Current$100.91
→
Intrinsic$153.85
+52%
$103.15$153.85$250.04
Market implies 14% growth for 5 years
DCF analysis suggests ITRI could have 52% upside at 25% growth — verify assumptions match your view.
At $101, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $103 → Bull $250. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$190$206$223$241
10%$132$142$154$166
12%$99$107$116$125
14%$79$85$92$99

Bull Case

  • Bull case ($250) offers 148% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (14%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($103) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$259.52M
Year 2$324.40M
Year 3$405.49M
Year 4$506.87M
Year 5$633.58M
Terminal$9.32B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$207.61MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ITRI stock undervalued or overvalued?
🟢 UNDERVALUED

ITRI trades at $100.91 vs. our DCF-derived intrinsic value of $126.59, implying +30% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of ITRI's future cash flows. The bear case ($81.31) still suggests upside, providing margin of safety.

What is ITRI's intrinsic value?

Using a 5-year DCF model: Base FCF of $208M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $231M net debt and dividing by 0.05B shares: Bear $81.31 | Base $126.59 | Bull $193.27. Current price $100.91 implies +30% to base case.

How is ITRI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($6.08B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.