Maxim Group analyst Tate Sullivan has reiterated their bullish stance on BMI stock, giving a Buy rating yesterday.
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Tate Sullivan has given his Buy rating due to a combination of factors that highlight the potential for Badger Meter’s continued growth and profitability. Despite a slight miss in earnings per share (EPS) expectations, the company’s revenue exceeded consensus estimates, driven by strong performance in its remote monitoring software services, particularly in the SaaS segment. This indicates a robust demand for their high-margin services, which positively impacts the gross profit margin.
Additionally, the acquisition of SmartCover has bolstered Badger Meter’s capabilities in monitoring sewer levels, contributing to the company’s revenue growth. While there are some concerns about increased selling, engineering, and administration costs, the company is expected to generate sufficient free cash flow to support potential acquisitions and dividend increases. The maintained gross profit margin guidance and the anticipation of high single-digit revenue growth from utilities further justify the Buy rating, even as the price target was slightly adjusted to reflect these dynamics.
Sullivan covers the Industrials sector, focusing on stocks such as Euroseas, NV5 Holdings, and NeoVolta. According to TipRanks, Sullivan has an average return of -6.1% and a 42.45% success rate on recommended stocks.
In another report released yesterday, Seaport Global also reiterated a Buy rating on the stock with a $265.00 price target.