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$ITI Earnings Report
Yesterday, $ITI reported earnings. The results were mixed and there is a lot to dig into. Starting with the negatives, the guide for 2023 was weaker than I expected. Iteris management projected a midpoint of $151 million in revenue and $8.3 million in adj EBITDA.
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While the revenue projections are weaker than I expected, the bottom end of the range still came above analyst estimates, albeit, there are only three. Adj EBITDA was below analyst estimates and mine, but management cited supply chains and margins will improve throughout the year.
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For the positives, Iteris backlog continues to be on fire. I continue to question when these contracts will flow to the revenue line, but unfortunately, that was not asked on the earnings call. I am surprised the guide was not stronger given the backlog.
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Iteris management noted how they continue to take share from the smaller players in the detection market. Their only public competitor’s revenue decreased significantly.
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Iteris also announced multiple partnerships in the private sector. Private sector revenue is now ~10% of total revenue. They also got statewide approval from New York State DoT. These are two greenfield opportunities for Iteris to grow.
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My biggest concern about Iteris coming into the call was their capital allocation strategy. I am excited to hear they announced a $10million buyback which equates to ~9% of their float. I am excited that management expressed confidence in the business and took action.
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youngmoneycap.substack.com
Iteris and the Roadway Sensor Industry
Analyst: Young Money Capital

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