We recently compiled a list of the 12 Best Internet of Things Stocks To Buy According to Analysts. In this article, we are going to take a look at where Itron, Inc. (NASDAQ:ITRI) stands against the other IoT stocks.

Trends and Outlook for The Internet of Things Industry

According to the IOT analytics, 2024 was a poor year for the Internet of Things sector, particularly due to the headwinds from the hardware sector. As per the report published on January 15, many IoT-centric industries experienced stunted year-over-year growth. The industrial software market grew 12% year-over-year, slightly slower than the growth in 2023, whereas the industrial hardware industry experienced market declines. However, despite the slowdown the number of IoT connected devices grew around 13% year-over-year, surpassing 18 billion. In addition, the expertise spending related to IoT also increased by 10% year-over-year to reach $298 billion in 2024. The report also highlighted that the discussion on IoT remained high among leading CEO’s of the technology industry. The public relevance of the term Internet of Things remained within 30% of its all-time high in 2022.

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Moreover, another report by McKinsey & Company states that IoT can offer significant economic value potential. The report highlights that IoT can unlock $5.5 trillion to $12.6 trillion in economic value by consumer IoT products and services. McKinney & Company predicts that the most economic value of the technology will come from its deployment in industrial environments including manufacturing, health care, and other areas. Factory setting is expected to be the largest beneficiary by generating around $1.4 trillion to $3.3 trillion by 2030, or 26% of the total value. Lastly, the perceived value of IoT, the technological advancements, and the emergence of 5G in Networking are anticipated to be the prominent tailwinds for the sector.

Our Methodology

To compile the list of the 12 best Internet of Things stocks to buy according to analysts we used the Global X Internet of Things ETF. Using the ETF we aggregated a list of IoT stocks with positive analyst upside potential (at least 10%), sourced from CNN. Lastly, we ranked the stocks in ascending order of the analyst upside potential. Please note that the data was retrieved on Monday, 17th February, 2025.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Itron, Inc. (NASDAQ:ITRI)

Analyst Upside Potential: 34.02%

Itron, Inc. (NASDAQ:ITRI) is a technology company that specializes in managing energy and water resources for utilities and cities. It not only makes hardware like meters to measure how much electricity, gas, or water people use but also offers advanced software and services that help utilities make better decisions by analyzing the data they collect from these networks. The company also works on projects to make cities more efficient using technologies like the Internet of Things (IoT), which helps manage infrastructure intelligently.

During the fiscal third quarter of 2024, the company reported strong execution across its segments, with revenue growth driven by increased demand for energy and water management solutions. Itron, Inc. (NASDAQ:ITRI) delivered a revenue of $615 million, up 10% year-over-year. Notably, the backlog remained strong at $4 billion towards the end of the third quarter, with bookings at $487 million.

ClearBridge Small Cap Value Strategy in its first quarter investor letter said the company’s 2024 guidance exceeds market estimates, indicating optimism about future growth and financial health. Moreover, historically speaking, supply chain challenges have affected a company’s performance. However, it appears that these issues have been largely resolved, allowing the company to focus on improving its operations. It is one of the best Internet of Things stocks to buy according to analysts.

ClearBridge Small Cap Value Strategy stated the following regarding Itron, Inc. (NASDAQ:ITRI) in its first quarter 2024 investor letter:

“For the Strategy in the quarter, stock selection in the IT sector was the largest contributor to relative performance. Network solutions company Itron, Inc. (NASDAQ:ITRI) was also rewarded for strong quarterly results and issuing 2024 guidance above market estimates. The company appears to have largely shrugged off the supply chain issues that have weighed on past performance and looks to continue to improve its margins by closing two weaker-margin factories this year and announcing several new partnerships to support growth in both its software and network segments.”

Overall ITRI ranks 2nd on our list of the best IoT stocks to buy according to analysts. While we acknowledge the potential of ITRI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ITRI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.