Evaluating Badger Meter (BMI): Is Strong Revenue Growth and Cash Flow Driving a Re-Rating?

Badger Meter (BMI) recently delivered impressive annual revenue growth and profitability gains, supported by streamlined operations and a long history of successful acquisitions. Its strong free cash flow continues to attract keen investor attention.

See our latest analysis for Badger Meter.

Badger Meter’s recent performance has kept longer-term investors on their toes, with the latest share price at $179.75 and resilient fundamentals supporting its outlook. Although the 1-year total shareholder return is slightly negative, the company’s three- and five-year total returns remain robust. This points to enduring momentum, supported by consistent earnings and expanding operations.

If Badger Meter’s track record has you searching for your next idea, this is a great moment to explore opportunities among fast growing stocks with high insider ownership.

With Badger Meter's fundamentals on solid ground and growth strategies fueling momentum, investors face a pivotal question. Is the current price undervaluing future potential, or has the market already factored in the company’s next leg of growth?

Most Popular Narrative: 24.3% Undervalued

The most widely followed narrative sees Badger Meter's fair value well above its recent closing price, reflecting optimism about future growth drivers. Here's a key catalyst shaping those expectations:

The increasing emphasis on water conservation and sustainable infrastructure is driving elevated demand from utilities for advanced metering and monitoring solutions. Badger Meter's continued success with its BEACON SaaS platform, BlueEdge suite, and recent SmartCover acquisition positions the company to capture a larger share of this growing market, supporting high single-digit revenue growth targets over the long run.

Read the complete narrative.

Want to know why analysts believe this price surge is just the start? The hot topic: a future profit multiple not seen in everyday industrials, plus bold earnings projections tied to innovation and recurring revenues. The suspense is how much upside these catalysts really provide. Find out what other numbers support this valuation leap.

Result: Fair Value of $237.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing unpredictability in input costs and delays in large municipal projects could each weaken the momentum behind Badger Meter’s bullish growth outlook.

Find out about the key risks to this Badger Meter narrative.

Another View: The Market Ratio Says "Expensive"

While some see strong upside from growth and innovation, the market's favored measure, the price-to-earnings ratio, tells a different story. Badger Meter trades at 39 times earnings, significantly above both its peer group and a fair ratio estimate of 25.4 times. That premium suggests investors are paying up now and taking on more valuation risk if growth doesn't meet expectations. Will this gap close, or is there more upside lurking?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Badger Meter Narrative

If you're curious to challenge these viewpoints or prefer diving into the numbers yourself, you have the tools to quickly shape your own perspective. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Badger Meter.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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