How Strong Utility Sales and Innovation Investments at Badger Meter (BMI) Have Changed Its Investment Story

• Earlier in November 2025, Badger Meter posted third-quarter earnings per share of $1.19, exceeding expectations, with higher utility water sales and strong demand for its cellular AMI and BlueEdge smart water management solutions driving growth.
• Management raised its gross margin target and reiterated confidence in long-term growth, emphasizing the positive impact of recent acquisitions like SmartCover and ongoing investments in innovation.
• We'll explore how Badger Meter's raised gross margin outlook and innovation investments influence its long-term investment narrative.

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Badger Meter Investment Narrative Recap

To be a shareholder in Badger Meter, you need to believe in accelerating water infrastructure digitization, recurring high-margin software sales, and ongoing demand for sustainability-driven water management. The recent Q3 earnings beat and raised gross margin outlook provide confidence for those focused on margin expansion, but the results do not materially alter the biggest short-term catalyst, integration of new technologies and acquisitions, nor do they fully offset ongoing risks related to input costs and procurement cycles.

The most relevant company announcement related to this news is the raised gross margin target to 39–42%. This aligns directly with the quarter’s strong demand for BlueEdge and cellular AMI, and highlights how innovation investment and recent acquisitions are being converted into higher profitability, supporting the long-term goal of expanding both top-line growth and operating efficiency.

However, investors should also be aware that if gross margins were to come under pressure from commodity cost spikes or project delays, the margin uplift story could shift very quickly…

Read the full narrative on Badger Meter (it's free!)

Badger Meter's outlook anticipates $1.1 billion in revenue and $182.2 million in earnings by 2028. This is based on an annual revenue growth rate of 8.5% and an increase in earnings of $46.5 million from the current $135.7 million.

Uncover how Badger Meter's forecasts yield a $219.50 fair value, a 24% upside to its current price.

Exploring Other Perspectives

Five members of the Simply Wall St Community see Badger Meter’s fair value ranging from US$152,110 to US$275 per share. While gross margin gains are a positive catalyst, uneven procurement cycles remain a key concern for future stability, explore these contrasting views to see how expectations shape up.

Explore 5 other fair value estimates on Badger Meter - why the stock might be worth 14% less than the current price!

Build Your Own Badger Meter Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Badger Meter research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Badger Meter research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Badger Meter's overall financial health at a glance.

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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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