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Badger Meter (BMI)
NYSE:BMI
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Badger Meter (BMI) AI Stock Analysis

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BMI

Badger Meter

(NYSE:BMI)

Rating:79Outperform
Price Target:
Badger Meter's strong financial performance and positive earnings call provide a solid foundation for the stock, despite mixed technical indicators and high valuation concerns. The company's robust revenue growth, profitability, and strategic outlook suggest a well-managed business, supporting the overall positive score.
Positive Factors
Market Share Expansion
The acquisition of SmartCover is expected to increase BMI's market share of U.S. water utility spending.
Profitability
BMI achieved the highest quarterly gross profit margin in its history, driven by a favorable sales mix.
Revenue Growth
BMI reported revenue modestly above consensus, driven by higher-margin remote monitoring software services.
Negative Factors
Earnings Performance
EPS was below expectations due to higher selling, engineering and administration costs.
Integration Challenges
The integration of SmartCover is expected to initially result in lower profit margins due to intangible amortization.

Badger Meter (BMI) vs. SPDR S&P 500 ETF (SPY)

Badger Meter Business Overview & Revenue Model

Company DescriptionBadger Meter, Inc. manufactures and markets flow measurement, quality, control, and communication solutions in the United States, Asia, Canada, Europe, Mexico, the Middle East, and internationally. It offers mechanical or static water meters, and related radio and software technologies and services to municipal water utilities. The company also provides flow instrumentation products, including meters, valves, and other sensing instruments to measure and control fluids going through a pipe or pipeline, including water, air, steam, oil, and other liquids and gases to original equipment manufacturers as the primary flow measurement device within a product or system, as well as through manufacturers' representatives. Its flow instrumentation products are used in water/wastewater, heating, ventilating and air conditioning, and corporate sustainability markets. In addition, the company offers ORION Migratable for automatic meter reading; ORION (SE) for traditional fixed network applications; and ORION Cellular for infrastructure-free fixed network meter reading solution, as well as BEACON advanced metering analytics, a secure cloud-hosted software suite that establishes alerts for specific conditions and allows consumer engagement tools that permit end water customers to view and manage their water usage activity. It also serves water utilities, industrial, and other industries. The company sells its products directly, as well as through resellers and representatives. Badger Meter, Inc. was incorporated in 1905 and is headquartered in Milwaukee, Wisconsin.
How the Company Makes MoneyBadger Meter makes money primarily through the sale of its metering products and solutions to water utilities, municipalities, and industrial clients. The company's revenue streams are driven by the demand for its water meters, flow instrumentation systems, and smart metering technologies that provide accurate water usage data and analytics. Badger Meter also generates income through its service offerings, which include installation, maintenance, and data management solutions. Significant partnerships with municipal and industrial clients, as well as an increasing global emphasis on water conservation and efficient resource management, contribute to the company's earnings.

Badger Meter Earnings Call Summary

Earnings Call Date:Jul 22, 2025
(Q2-2025)
|
% Change Since: -23.33%|
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong sales growth and successful integration of SmartCover, along with improved cash flow and gross margins. However, it also noted challenges such as declining operating margins, expected sequential sales decline, and rising SEA expenses due to acquisitions and personnel costs. The company faces macroeconomic uncertainties, particularly related to tariffs.
Q2-2025 Updates
Positive Updates
Record Sales Growth
Total sales reached $238 million in Q2 2025, representing a 10% year-over-year increase, or 5% excluding the SmartCover acquisition.
Strong Free Cash Flow
Free cash flow increased 19% year-over-year to $40.6 million, attributed to higher earnings and working capital improvements.
Gross Margin Expansion
Gross margins expanded 170 basis points to 41.1% from 39.4% in the previous year, despite trade-related cost pressures.
SmartCover Integration Progress
The integration of SmartCover is on track with anticipated sales and cost synergies being realized.
BlueEdge Momentum
The BlueEdge portfolio is gaining traction with new solutions like the Field App and Cobalt, enhancing customer engagement and positioning.
Negative Updates
Operating Margin Decline
Operating margins decreased by 40 basis points to 18.8% from 19.2% in the prior year, due to higher SEA expenses.
Sequential Sales Decline Expected
Sales are expected to decline sequentially in Q3 2025 due to the completion of several AMI projects, although year-over-year growth is still anticipated.
Tariff and Cost Pressures
Ongoing trade uncertainty and potential tariff impacts, especially related to copper, pose risks to cost stability.
Increased SEA Expenses
SEA expenses rose by approximately $9.1 million year-over-year, primarily due to SmartCover acquisition costs and increased personnel expenses.
Company Guidance
During the second quarter of 2025, Badger Meter reported a 10% year-over-year sales increase, reaching $238 million, or 5% growth excluding the SmartCover acquisition. Operating earnings rose by 8% to $44.9 million, although operating margins slightly decreased by 40 basis points to 18.8%. Gross margins improved by 170 basis points to 41.1% from 39.4% in the previous year, driven by technology adoption and operational excellence initiatives. The income tax provision was 24.5%, up from the prior year's 23.8%, and consolidated EPS increased to $1.17 from $1.12. Free cash flow surged by 19% to $40.6 million. Despite ongoing macroeconomic uncertainties, the company maintains a positive outlook, supported by strong customer demand, technology adoption, and strategic investments, including the integration of SmartCover, which contributed over $10 million in sales. The company anticipates sequential sales decline in Q3 2025 due to project timing but expects continued year-over-year growth.

Badger Meter Financial Statement Overview

Summary
Badger Meter demonstrates strong financial health with solid growth and profitability. Revenue growth, robust margins, and excellent balance sheet stability with no debt are major positives. Strong cash flow management supports reinvestment and shareholder value, indicating a well-managed company with a sound financial position.
Income Statement
85
Very Positive
Badger Meter demonstrates strong revenue growth with a TTM revenue increase of 3.13% compared to the previous year. Gross profit margin is solid at 40.76%, and the net profit margin is healthy at 15.74%. EBIT and EBITDA margins are also robust, indicating efficient operations and strong profitability.
Balance Sheet
78
Positive
The company maintains a strong equity position with an equity ratio of 71.33%, indicating financial stability. The debt-to-equity ratio is excellent at 0 due to no outstanding debt, reducing financial risk. ROE is impressive at 20.91%, showcasing effective use of equity capital, though a slight decrease from the previous year.
Cash Flow
82
Very Positive
Operating cash flow is strong relative to net income, demonstrating effective cash management. Free cash flow growth rate is robust at 1.54% over the past year, indicating healthy liquidity and capacity for reinvestment or shareholder returns. The free cash flow to net income ratio is high, showing strong cash generation.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue826.56M703.59M565.57M505.20M425.54M
Gross Profit329.18M276.44M219.97M205.48M168.25M
EBITDA190.12M146.03M113.41M106.47M90.23M
Net Income124.94M92.60M66.50M60.88M49.34M
Balance Sheet
Total Assets816.41M716.92M603.05M530.82M468.38M
Cash, Cash Equivalents and Short-Term Investments295.31M191.78M138.05M87.17M72.27M
Total Debt0.005.76M6.79M6.18M7.22M
Total Liabilities210.18M200.44M160.63M127.75M107.12M
Stockholders Equity606.23M516.48M442.42M403.07M361.26M
Cash Flow
Free Cash Flow142.22M98.11M76.56M80.76M80.52M
Operating Cash Flow155.03M110.12M82.45M87.51M89.58M
Investing Cash Flow-15.82M-29.13M-5.89M-51.42M-38.19M
Financing Cash Flow-35.10M-28.09M-24.61M-20.51M-27.82M

Badger Meter Technical Analysis

Technical Analysis Sentiment
Negative
Last Price188.00
Price Trends
50DMA
238.27
Negative
100DMA
221.31
Negative
200DMA
218.07
Negative
Market Momentum
MACD
-13.11
Positive
RSI
19.94
Positive
STOCH
7.06
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BMI, the sentiment is Negative. The current price of 188 is below the 20-day moving average (MA) of 226.66, below the 50-day MA of 238.27, and below the 200-day MA of 218.07, indicating a bearish trend. The MACD of -13.11 indicates Positive momentum. The RSI at 19.94 is Positive, neither overbought nor oversold. The STOCH value of 7.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BMI.

Badger Meter Risk Analysis

Badger Meter disclosed 21 risk factors in its most recent earnings report. Badger Meter reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Badger Meter Peers Comparison

Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$5.68B41.9421.88%0.72%15.08%30.86%
77
Outperform
$4.93B41.809.66%0.17%8.40%20.03%
75
Outperform
$3.76B27.4016.73%14.93%12.89%
74
Outperform
$6.21B24.8517.73%7.10%58.52%
71
Outperform
$5.86B55.014.39%1.19%-3.43%-50.48%
71
Outperform
$5.81B50.648.02%0.92%8.56%18.99%
50
Neutral
C$3.11B2.48-63.12%2.59%4.49%-5.92%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BMI
Badger Meter
188.00
-12.80
-6.37%
CGNX
Cognex
34.26
-14.18
-29.27%
ESE
Esco Technologies
193.59
72.21
59.49%
ITRI
Itron
136.62
35.08
34.55%
LFUS
Littelfuse
235.79
-19.80
-7.75%
OSIS
OSI Systems
225.22
77.46
52.42%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 20, 2025