Yahoo Finance Badger Meter (BMI) Surges 22.1% YTD: Will the Rally Continue?
Badger Meter, Inc. BMI is continuing its upward trajectory, with a gain of 22.1% year to date compared with the S&P 500 composite and sub-industry’s growth of 7.6% and 13.9%, respectively.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #1 (Strong Buy) stock appears to be a solid investment option at the moment.
Apart from a favorable rank, BMI has a Growth Score of B. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 (Buy) and a Growth Score of A or B offer solid investment opportunities.
The stock is down 6.9% from its 52-week high level of $202.81, making it relatively affordable for investors.
BMI’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 12.7%. The long-term earnings growth rate is 15.6%.
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Growth Catalysts
Badger Meter is a leading provider of water solutions, which include flow measurement, quality and other system parameters. The company’s products measure water, oil, chemicals and other fluids. Its products are known for accuracy, long-lasting durability and provide valuable and timely measurement data.
BMI performance is driven by increased adoption of its differentiated smart water solutions and smooth operational execution. Demand for digital smart water solutions has been increasing attributed to changing secular challenges.
Continued strength in E-Series ultrasonic meters, cellular AMI solution, ORION Cellular endpoint sales and higher BEACON Software-as-a-Service revenues, along with rising demand for water quality and pressure monitoring systems, bode well. Its efforts to broaden the global footprint are creating a tailwind. In the last reported quarter, utility water sales rose 29% driven by strong demand momentum.
Margins are gaining from higher volumes and structural positive sales mix trends. In the first quarter of 2024, operating earnings were $36.6 million or 18.6% of sales compared with $25 million or 15.7% of sales in the year-ago quarter.
Strategic and tuck-in acquisitions have played a pivotal role in expanding business operations for BMI. Earlier, in 2024, the company expanded its solutions portfolio by acquiring select remote water monitoring hardware and software solutions from Trimble, including the Telog brand of remote telemetry units and Trimble Unity Remote Monitoring software.
A debt-free balance sheet is another positive. As of Mar 31, the company had $199.3 million of cash and cash equivalents and $135.1 million of total current liabilities compared with $191.8 million and $131.9 million, respectively, as of Dec 31, 2023.
However, management expects to witness tougher year-over-year comparisons as the year progresses and higher expenses owing to incremental growth investments. An uncertain global macroeconomic backdrop, forex volatility and intensified competition are added headwinds.
Estimates Moving North
The Zacks Consensus Estimate for Badger Meter’s EPS is expected to increase 23.9% and 10.1% from the year-ago levels to $3.89 and $4.28 in 2024 and 2025, respectively.
In the past 60 days, the Zacks Consensus Estimate for BMI’s 2024 and 2025 earnings has increased 9.9% and 8.9%, respectively, reflecting analysts’ optimism.
The Zacks Consensus Estimate for the company’s revenues for 2024 and 2025 are projected to rise 13.6% and 7.1% to $799.1 million and $855.8 million, respectively.
Other Stocks to Consider
Some other top-ranked stocks worth consideration in the broader technology space are Alphabet GOOGL, Arista Networks ANET and Woodward Inc WWD, currently sporting a Zacks Rank #1 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alphabet’s 2024 EPS is pegged at $7.60, up 12.1% in the past 60 days. GOOGL’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.3%. The long-term earnings growth rate is 17.5%. Shares of GOOGL have risen 39.7% in the past year.
The Zacks Consensus Estimate for Arista Network’s 2024 EPS is pegged at $7.92, up 5.7% in the past 60 days. The long-term earnings growth rate is 15.7%. ANET’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 15.4%. Shares of ANET have gained 102.9% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has increased 11.4% in the past 60 days to $5.88. WWD earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 26.1%. Shares of WWD have risen 61.4% in the past year.
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Badger Meter, Inc. (BMI) : Free Stock Analysis Report
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