Winners And Losers Of Q2: Itron (NASDAQ:ITRI) Vs The Rest Of The Inspection Instruments Stocks

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Itron (NASDAQ:ITRI) and the rest of the inspection instruments stocks fared in Q2.

Measurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.

The 7 inspection instruments stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.5% below.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

Luckily, inspection instruments stocks have performed well with share prices up 19.5% on average since the latest earnings results.

Itron (NASDAQ:ITRI)

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ:ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

Itron reported revenues of $609.1 million, up 12.6% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ earnings and operating margin estimates.

“The second quarter of 2024 was successful for Itron.” said Tom Deitrich, Itron’s president and CEO.

Itron delivered the weakest full-year guidance update of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $104.

Is now the time to buy Itron? Access our full analysis of the earnings results here, it’s free.

Best Q2: Badger Meter (NYSE:BMI)

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.

Badger Meter reported revenues of $216.7 million, up 23.2% year on year, outperforming analysts’ expectations by 6.5%. The business had a stunning quarter with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

Badger Meter pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 12.8% since reporting. It currently trades at $219.

Is now the time to buy Badger Meter? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Mirion (NYSE:MIR)

With its monitoring devices installed on spacecraft, Mirion (NYSE:MIR) offers radiation technology to government agencies, healthcare providers, and industrial companies.

Mirion reported revenues of $207.1 million, up 5% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter, leaving some shareholders looking for more.

Interestingly, the stock is up 8.3% since the results and currently trades at $11.15.

Read our full analysis of Mirion’s results here.

Keysight (NYSE:KEYS)

Spun off from Hewlett-Packard in 2014, Keysight (NYSE:KEYS) offers electronic measurement products for use in various sectors.

Keysight reported revenues of $1.22 billion, down 11.9% year on year. This print beat analysts’ expectations by 1.9%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ earnings and operating margin estimates.

Keysight had the slowest revenue growth among its peers. The stock is up 11.1% since reporting and currently trades at $154.

Read our full, actionable report on Keysight here, it’s free.

FARO (NASDAQ:FARO)

Launched by two PhD students in a garage, FARO (NASDAQ:FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.

FARO reported revenues of $82.09 million, down 6.9% year on year. This result lagged analysts' expectations by 1.9%. It was a slower quarter as it also logged revenue guidance for next quarter missing analysts’ expectations.

FARO had the weakest performance against analyst estimates among its peers. The stock is up 26.6% since reporting and currently trades at $18.27.

Read our full, actionable report on FARO here, it’s free.

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