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Badger Meter (BMI)
NYSE:BMI
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Badger Meter
(NYSE:BMI)65Neutral
Positive Factors
Acquisition
The acquisition of SmartCover is expected to increase BMI's market share of U.S. water utility spending.
Financial Performance
BMI reported 4Q24 revenue above expectations, showing strong growth in municipal water revenue.
Negative Factors
Profit Margins
The integration of SmartCover is expected to initially result in lower profit margins due to intangible amortization and lower initial margins.
Badger Meter (BMI) vs. S&P 500 (SPY)
Market Cap
$6.17B
Dividend Yield0.61%
Average Volume (3M)221.36K
Price to Earnings (P/E)49.6
Beta (1Y)1.00
Revenue Growth17.48%
EPS Growth34.60%
CountryUS
Employees2,140
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)4.23
Shares Outstanding29,410,892
10 Day Avg. Volume227,371
30 Day Avg. Volume221,358
Financial Highlights & Ratios
PEG Ratio1.43
Price to Book (P/B)N/A
Price to Sales (P/S)7.46
Price to Cash Flow (P/CF)29.60
P/FCF Ratio28.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$227.00Price Target Upside8.26% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Badger Meter Business Overview & Revenue Model
Company DescriptionBadger Meter, Inc. is a leading innovator and manufacturer of flow measurement and control solutions, serving a wide range of sectors including water utilities, municipalities, and industrial customers. The company specializes in the development of products and services that help optimize and manage water usage efficiently. Its core offerings include water meters, flow instrumentation, and advanced metering technologies that facilitate data-driven decision making for improved operational efficiency.
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 Financial Statement Overview
Summary
Badger Meter demonstrates strong financial performance with robust revenue and profit growth, a solid balance sheet with low leverage, and efficient cash flow management. However, there is room for improvement in operational efficiencies and free cash flow generation.Income Statement
Badger Meter has demonstrated strong revenue growth with a consistent upward trend over the past five years. The gross profit margin remains healthy, indicating effective cost management. The net profit margin and EBIT margin show significant improvement, reflecting enhanced profitability. However, EBITDA margin has remained stable, suggesting room for operational efficiency improvements.85
Very Positive
Balance Sheet
The balance sheet is solid with substantial stockholders' equity and low debt levels, resulting in a very low debt-to-equity ratio. This indicates financial stability and low leverage risk. The return on equity has improved over the years, showcasing effective utilization of equity. The equity ratio is robust, underscoring a strong capital structure.80
Positive
Cash Flow
Operating cash flow has shown consistent growth, and free cash flow remains strong. The company efficiently converts net income into cash flows, as evidenced by a healthy operating cash flow to net income ratio. However, the free cash flow growth rate has been modest, suggesting limited expansion in free cash flow generation capacity.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 826.56M | 703.59M | 565.57M | 505.20M | 425.54M | Gross Profit |
| 329.18M | 276.44M | 219.97M | 205.48M | 168.25M | EBIT |
| 157.94M | 118.05M | 87.30M | 78.72M | 65.16M | EBITDA |
| 157.94M | 146.03M | 113.41M | 106.47M | 90.23M | Net Income Common Stockholders |
| 124.94M | 92.60M | 66.50M | 60.88M | 49.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 295.31M | 191.78M | 138.05M | 87.17M | 72.27M | Total Assets |
| 816.41M | 716.92M | 603.05M | 530.82M | 468.38M | Total Debt |
| 0.00 | 5.76M | 6.79M | 6.18M | 7.22M | Net Debt |
| -295.31M | -186.02M | -131.26M | -81.00M | -65.06M | Total Liabilities |
| 210.18M | 200.44M | 160.63M | 127.75M | 107.12M | Stockholders Equity |
| 606.23M | 516.48M | 442.42M | 403.07M | 361.26M |
| Cash Flow | Free Cash Flow | |||
| 155.03M | 98.11M | 76.56M | 80.76M | 80.52M | Operating Cash Flow |
| 155.03M | 110.12M | 82.45M | 87.51M | 89.58M | 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
Negative
209.68
Price Trends
213.58
Negative
215.29
Negative
206.44
Positive
Market Momentum
-1.58
Positive
44.78
Neutral
29.43
Neutral
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 209.68 is below the 20-day moving average (MA) of 213.71, below the 50-day MA of 213.58, and above the 200-day MA of 206.44, indicating a neutral trend. The MACD of -1.58 indicates Positive momentum. The RSI at 44.78 is Neutral, neither overbought nor oversold. The STOCH value of 29.43 is Neutral, 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $31.80B | 35.86 | 0.00% | 1.14% | 16.23% | 34.42% | |
73 Outperform | $15.53B | 25.17 | 17.55% | 1.02% | -0.53% | 0.13% | |
73 Outperform | $2.96B | 24.50 | 12.96% | 2.34% | -0.04% | -5.82% | |
71 Outperform | $10.65B | 17.86 | 9.60% | 3.28% | 1.57% | 16.50% | |
65 Neutral | $6.17B | 49.57 | 20.61% | 0.61% | 17.48% | 34.60% | |
63 Neutral | $9.42B | 18.08 | 28.33% | 1.99% | -0.90% | -1.69% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
BMI
Badger Meter
209.68
48.08
29.75%
AWR
American States Water
77.61
7.85
11.25%
WTRG
Essential Utilities
38.75
4.98
14.75%
PNR
Pentair
89.67
11.33
14.46%
AOS
A. O. Smith Corporation
65.61
-17.45
-21.01%
XYL
Xylem
127.32
2.37
1.90%
Badger Meter Earnings Call Summary
Earnings Call Date: Jan 31, 2025 | % Change Since: 0.69% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in revenue growth, profitability, and strategic acquisitions, offset by concerns over increased expenses and potential short-term dilution from the SmartCover acquisition. However, the company's positive outlook and strategic positioning suggest a focus on long-term growth.Highlights
Record Revenue and Sales Growth
Badger Meter delivered 13% quarterly sales growth in Q4 2024, on top of a 24% increase in the prior year. Total utility water product line sales increased 14% year-over-year, with broad-based growth led by cellular AMI adoption.
Strong Financial Performance
Gross profit margins improved by 110 basis points to 40.3%, and operating margins expanded 150 basis points to 19.1%. Consolidated EPS was $1.04, a 24% improvement from the prior year.
Successful Acquisition of SmartCover
Badger Meter announced the acquisition of SmartCover for $185 million, enhancing its portfolio with sewer and lift station monitoring solutions. This acquisition is expected to leverage Badger Meter's market position and drive long-term shareholder value.
Improved Working Capital and Cash Flow
Primary working capital as a percent of sales improved to 20.8% from 23.8% the previous year. Free cash flow reached a record $47.4 million, up 32% year-over-year.
Lowlights
Higher SEA Expenses
SEA expenses increased by approximately $4 million year-over-year due to personnel-related costs and acquisition expenses. SEA as a percent of sales slightly declined to 21.2%.
SmartCover Short-term EPS Dilution
The SmartCover acquisition is expected to be EPS dilutive in 2025 due to opportunity costs related to interest, with accretion expected in the following year.
Potential Tariff Uncertainty
There is uncertainty around potential tariffs that could impact future profitability, with no clear indication of what the scale or impact might be.
Company Guidance
During the Q4 2024 earnings call, Badger Meter reported strong financial performance, highlighted by a 13% increase in quarterly sales and a record free cash flow of $47.4 million, marking a 32% year-over-year growth. The company achieved a gross profit margin of 40.3%, an improvement of 110 basis points from the previous year, while operating margins expanded by 150 basis points to 19.1%. Earnings per share rose by 24% to $1.04. Additionally, the acquisition of SmartCover was announced, which is expected to enhance Badger Meter's BlueEdge suite by incorporating sewer and lift station monitoring solutions. The acquisition was financed with $185 million in cash, and SmartCover is expected to contribute $35 million in sales with high single-digit EBITDA margins. Looking forward, Badger Meter anticipates high single-digit top-line growth, supported by robust demand for its smart water solutions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.