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1. Company Snapshot

1.a. Company Description

Badger 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.

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1.b. Last Insights on BMI

Badger Meter's recent performance was negatively impacted by weaker-than-expected quarterly earnings, with Q1 earnings of $0.93 per share missing the Zacks Consensus Estimate of $1.2 per share. Sales fell 9% year-over-year to $202.3 million due to project delays. The company's operating earnings and profit margin also declined. Analysts have since slashed their forecasts following the Q1 earnings release. Dundas Partners LLP decreased its position in the company by 90.8% during the quarter. The stock has a consensus rating of "Hold" from brokerages, according to MarketBeat.com.

1.c. Company Highlights

2. Badger Meter Q1 2026: Soft Start, Strategic Upside

Badger Meter reported Q1 2026 revenue of $202 million, a 9% decline YoY, driven by project pacing and weaker short‑cycle order rates. Gross margin slipped to 41.7% from a record 2025 level, yet the company maintained an operating margin of 17.4% on $35.2 million operating earnings. Diluted EPS fell to $0.93 versus $1.30 last year, while free cash flow hit $30 million and the firm repurchased 256,000 shares for $38 million. CEO Kenneth Bockhorst underscored confidence in a solid second half, citing awarded projects and a projected full‑year organic revenue on balance with 2025. Valuation metrics currently sit at a P/E of 25.85, P/B of 3.48, and EV/EBITDA of 15.88, with a 1.33% dividend yield and 5.15% free cash flow yield, reflecting a modestly priced upside amid a flat organic outlook.

Publication Date: Apr -18

📋 Highlights
  • Q1 Revenue Decline:: Revenue fell to $202 million (-9% YoY), driven by project pacing and weak short-cycle order rates.
  • Gross Margin Contraction:: Gross margin dipped to 41.7% (-120 bps YoY), despite management maintaining 39-42% target range for 2026.
  • UDLive Acquisition:: $100 million acquisition of UK-based sewer monitoring provider, expected to be EPS accretive in Year 1.
  • Project Pipeline Expansion:: 9 awarded projects with 2.6M–3.6M connections over next years, exceeding prior 800K connections (3-5 years vs. last 3).
  • EPS & Free Cash Flow:: Diluted EPS dropped to $0.93 (-28.5% YoY), while free cash flow totaled $30 million with $38 million spent on share repurchases.

Revenue Trends and Pipeline

The quarter’s 10% YoY drop in utility water sales highlights a temporary short‑cycle weakness, but management points to a robust pipeline of nine awarded projects totaling 2.6–3.6 million connections over the next few years—substantially higher than the 800,000 connections delivered in the prior three‑year span. Sequential revenue improvement is expected as these projects mature, with Q2 projected to be down YoY but higher than Q1.

Margin Outlook

Gross margin remains within the 39%–42% target range, bolstered by value‑based pricing. The PRASA project introduces a decremental margin impact, yet its operating leverage remains attractive. Management anticipates returning to a 25%–30% incremental margin level in the second half, offsetting the lower margins from the PRASA project.

Cash Flow and Shareholder Returns

Free cash flow of $30 million supports ongoing share repurchases and a modest dividend. The $38 million repurchase of 256,000 shares reflects a 1.33% dividend yield and a 5.15% free cash flow yield, underscoring the firm’s commitment to returning value to shareholders while maintaining liquidity.

Strategic Acquisition of UDLive

The $100 million purchase of UK‑based UDLive is expected to be EPS accretive in year one and closes in April. UDLive’s sewer line monitoring technology positions Badger Meter in an early‑adoption market, complementing the company’s SmartCover acquisition and offering clear payback through infiltration and inflow management.

Tariff Exposure and Supply Chain

Section 232 tariff exposure has remained stable, with the Nogales facility continuing to optimize costs and manage the supply chain efficiently. This disciplined approach mitigates external tariff risk while preserving margin integrity.

Second‑Half Guidance and Outlook

Management forecasts sequential revenue growth in the second half, projecting a flat organic outlook for the full year but with incremental margin recovery to 25%–30%. The company remains bullish on high single‑digit growth for 2027, driven by project deployment momentum.

Valuation and Investor Sentiment

3. NewsRoom

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Badger Meter Completes Acquisition of UDlive

May -01

Source: businesswire.com

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BMI Investigation: Kessler Topaz Meltzer & Check, LLP Encourages Badger Meter, Inc. (NYSE: BMI) Investors to Contact the Firm

May -01

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Badger Meter, Inc. - BMI

May -01

Source: prnewswire.com

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NYSE: BMI Investigation Alert: Kessler Topaz Meltzer & Check, LLP Encourages Badger Meter, Inc. (NYSE: BMI) Investors to Contact the Firm

Apr -30

Source: globenewswire.com

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Itron's Q1 Earnings and Sales Surpass Estimates, Down Y/Y

Apr -29

Source:

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Sensata Q1 Earnings & Revenues Beat Estimates, Increase Y/Y

Apr -29

Source:

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Badger Meter, Inc. - BMI

Apr -28

Source: globenewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Badger Meter, Inc. - BMI

Apr -28

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.00%)

6. Segments

Flow Measurement, Control, Quality and Communication Solutions

Expected Growth: 7.0%

Badger Meter's 7.0% growth driven by increasing demand for accurate flow measurement, control, and quality solutions in water and gas utilities, industrial processes, and smart city infrastructure. Growing adoption of IoT and digital technologies also fuels growth, as customers seek real-time data and analytics to optimize operations and reduce waste.

7. Detailed Products

Water Meters

Accurate and reliable water meters for residential, commercial, and industrial applications

Gas Meters

High-accuracy gas meters for residential, commercial, and industrial applications

Flow Meters

Accurate and reliable flow meters for measuring liquid flow rates in various industries

Orion Metering Systems

Advanced metering systems for water, gas, and electric utilities

BEACON Advanced Metering Analytics

Cloud-based analytics platform for water, gas, and electric utilities

E-Series Ultrasonic Meters

High-accuracy ultrasonic meters for water and gas measurement

Recordall Meters

Mechanical and electronic meters for water and gas measurement

8. Badger Meter, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Badger Meter, Inc. faces moderate threat from substitutes due to the presence of alternative technologies and products in the water metering industry.

Bargaining Power Of Customers

Badger Meter, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Badger Meter, Inc. relies on a few key suppliers for components and materials, giving them some bargaining power, but the company's size and reputation help mitigate this risk.

Threat Of New Entrants

The water metering industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to challenge Badger Meter, Inc.'s market position.

Intensity Of Rivalry

The water metering industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.10%
Debt Cost 3.95%
Equity Weight 98.90%
Equity Cost 8.03%
WACC 7.98%
Leverage 1.11%

11. Quality Control: Badger Meter, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Teledyne Technologies

A-Score: 5.4/10

Value: 3.1

Growth: 6.3

Quality: 6.8

Yield: 0.0

Momentum: 7.0

Volatility: 9.3

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OSI Systems

A-Score: 4.9/10

Value: 2.6

Growth: 5.9

Quality: 7.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

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Jabil

A-Score: 4.8/10

Value: 3.5

Growth: 6.6

Quality: 4.4

Yield: 0.0

Momentum: 9.0

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Vontier

A-Score: 4.6/10

Value: 5.5

Growth: 3.7

Quality: 6.4

Yield: 0.0

Momentum: 5.0

Volatility: 7.3

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Badger Meter

A-Score: 4.5/10

Value: 1.2

Growth: 8.0

Quality: 7.2

Yield: 1.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

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Plexus

A-Score: 4.2/10

Value: 4.0

Growth: 6.2

Quality: 5.5

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

121.98$

Current Price

121.98$

Potential

-0.00%

Expected Cash-Flows