Ituran Location and Control Ltd. (ITRN) DCF Valuation & Fundamental Primer
Ituran Location and Control Ltd. (ITRN) currently trades at $44.44 with an enterprise value of $837.2M. Our proprietary institutional model rates Ituran Location and Control Ltd. at 82/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 16.8% vs. historical growth of 17.4% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Ituran Location and Control Ltd. (ITRN) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Ituran Location and Control Ltd. (ITRN) 3-Scenario DCF Valuation Range
Stress-test ITRN's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $44.44).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $50.20 +13% | $53.17 +20% | $56.64 +27% | $60.74 +37% | $65.66 +48% |
| 9.3% | $45.36 +2% | $47.71 +7% | $50.40 +13% | $53.52 +20% | $57.18 +29% |
| 10.0% | $41.39 -7% | $43.27 -3% | $45.41 +2% | $47.85 +8% | $50.66 +14% |
| 10.8% | $38.07 -14% | $39.61 -11% | $41.33 -7% | $43.28 -3% | $45.50 +2% |
| 11.5% | $35.25 -21% | $36.53 -18% | $37.94 -15% | $39.53 -11% | $41.31 -7% |
Institutional Software Quality Scorecard (82/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Elevated equity dilution; SBC consumes substantial operating cash flow
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 1419% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 77.9% gross margin and 40.1% Rule of 40 score
- Net cash positive: $66.2M balance sheet buffer
Key Operational & Dilution Risks
- Substantial SBC dilution drag: SBC is 18.9% of revenue ($27.8M)
Reverse-DCF Solver: What Growth is Priced Into ITRN?
Market implies 16.8% annual revenue growth over next 5 years (34.0% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (18.9% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 34.0% 5-year revenue CAGR to justify $44.44/sh on a true per-share economic cash flow basis.
Ituran Location and Control Ltd. (ITRN) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $147.3M | $147.3M | $173.0M | $203.1M | $238.4M | $279.9M | $328.6M |
| Gross Profit | $114.8M | $114.8M | $134.8M | $158.2M | $185.7M | $218.0M | $256.0M |
| Operating Income (EBIT) | $2.4M | $2.4M | $2.8M | $3.2M | $3.8M | $4.5M | $5.3M |
| Stock-Based Compensation (SBC) | $27.8M | $27.8M | $32.7M | $38.4M | $45.1M | $52.9M | $62.1M |
| Unlevered Free Cash Flow (FCF) | $33.4M | $33.4M | $39.3M | $46.1M | $54.1M | $63.5M | $74.6M |
| SBC-Adjusted True Cash Flow | $5.6M | $5.6M | $6.6M | $7.7M | $9.1M | $10.6M | $12.5M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -25.4 + 0.73 × (Rule of 40) · R² = 80%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Ituran Location and Control Ltd. | ITRN | $884.1M | $147.3M | 77.9% | 22.7% | 40.1% | 18.9% | 5.5× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 5.6× | $817.9M | $884.1M | $44.44 | 0.0% |
| -20% Multiple Compression | 4.4× | $654.3M | $720.5M | $36.22 | -20.0% |
| -35% Multiple Compression | 3.6× | $531.6M | $597.8M | $30.05 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $736.7M | $802.9M | $40.36 | -9.9% |
Frequently Asked Questions: Ituran Location and Control Ltd. (ITRN) Valuation
What is Ituran Location and Control Ltd. (ITRN)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Ituran Location and Control Ltd. (ITRN) has a Base Case implied value of $45.41 per share (with a Bear Case of $22.41 and a Bull Case of $76.24), compared to its current price of $44.44. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Ituran Location and Control Ltd. (ITRN)'s Rule of 40 score and Free Cash Flow margin?
Ituran Location and Control Ltd. achieves a Rule of 40 score of 40.1%, combining a 17.4% revenue growth run-rate with a 22.7% TTM free cash flow margin on $147.3M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into ITRN stock according to Reverse-DCF analysis?
At $44.44 per share (Enterprise Value of $817.9M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 16.8%, compared to Ituran Location and Control Ltd.'s historical CAGR of 17.4%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Ituran Location and Control Ltd. compare to Software & Cloud Services software peers?
Ituran Location and Control Ltd. (ITRN) earns an institutional Software Quality Score of 82/100 (Grade A — High-Quality Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Ituran Location and Control Ltd. (ITRN)'s valuation?
Ituran Location and Control Ltd. recorded $27.8M in TTM stock-based compensation (18.9% of revenue). When treating SBC as a cash-equivalent compensation expense, Ituran Location and Control Ltd.'s SBC-adjusted free cash flow yield is 0.6%, scoring 10/25 on our Shareholder Dilution Friction pillar.