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what it is
Badger Meter sells the hardware and software utilities use to track water flow, leaks, and usage.
how it gets paid
Last year Badger Meter made $917M in revenue.
why it's growing
Revenue grew 315.3% last year. The quarter was fine, not dazzling. The bigger story is that gross margin hit 42.1%, helped by mix shifting toward higher-value products and software.
what just happened
Badger posted $221M in quarterly revenue and $1.14 EPS, with revenue up 8% and EPS up 10% vs. prior year.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
95/100 earnings predictability — you can trust these numbers
38.2x trailing p/e — you're paying up for this one
0.9% dividend yield — cash in your pocket every quarter
24.0% return on capital — every dollar works hard here
xvary composite: 63/100 — average
What they do
Badger Meter sells the hardware and software utilities use to track water flow, leaks, and usage.
Your local water utility does not rip out working meter networks for fun. Once Badger's meters, radio endpoints, and software are installed, leaving means replacing field hardware, retraining crews, and risking billing errors. Only 40% of U.S. water meters have been modernized, according to the company, so the replacement runway is still bigger than the installed pain.
How they make money
$917M
annual revenue · their business grew +315.3% last year
total revenue
$917M
+315.3%
The products that matter
measures and manages flow
Flow measurement and control
$0.9B revenue · +10.9% growth
it is the whole company today — all $0.9B of revenue. that concentration is both the appeal and the risk. if this lane keeps compounding, the story works. if it slows, there is nowhere else to hide.
entire business
remote utility meter reading
AMI water metering
40% converted in the u.s.
the company said only 40% of water meters in service across the u.s. have been converted to AMI systems. in human-speak: the runway is real, and the stock assumes a good chunk of the remaining 60% gets addressed on schedule.
upgrade cycle
adjacent opportunity management is not forcing
Water quality
optional, not central
there is an additional water-quality opportunity, but management has chosen not to chase it so far. that makes the story narrower, but it also keeps you from underwriting a side business that is not yet carrying the numbers.
focus over sprawl
Key numbers
38.2x
trailing p/e
You are paying a software-style multiple for a water infrastructure company, so execution has to stay clean.
24.0%
operating margin
Operating margin → profit after running the business → so what: this company keeps $24 from every $100 of sales before interest and taxes.
24.0%
return on capital
Return on capital → profit generated from money invested in the business → so what: Badger turns capital into earnings far better than an average industrial company.
0.9%
dividend yield
The dividend is real, but tiny. You own this for growth and execution, not income.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 60 / 100
- net profit margin 16.6% — keeps 17 cents of every dollar in revenue
- return on equity 24% — $0.24 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in BMI 3 years ago → it's now worth $16,980.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Badger posted $221M in quarterly revenue and $1.14 EPS, with revenue up 8% and EPS up 10% vs. prior year.
The quarter was fine, not dazzling. The bigger story is that gross margin hit 42.1%, helped by mix shifting toward higher-value products and software.
$221M
revenue
$1.14
eps
42.1%
gross margin
the number that mattered
42.1% gross margin mattered most because mix, not just volume, is driving profit growth.
-
we have raised our 2025 shareearnings estimate for badger meter by a dime.
-
at $4.80, our new call represents an increase of 13% over the $4.23 that the wisconsin-based maker of water meters tallied in 2024.key assumptions include acquisition-aided revenue of $930 million and solid improvement in the net profit margin. our more positive stance reflects greater-than-previously-assumed demand for the newer, technologyenabled offerings within badger’s product portfolio.
-
the company continues to benefit from a more favorable sales mix, as water utility customers, for example, upgrade from (legacy) mechanical meters with moving parts to solid-state ultrasonic ones that utilize high-frequency sound waves to measure water velocity within pipes.the ongoing shift towards networked systems should also drive sales growth for the foreseeable future.
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to wit, in its 2024 annual report, badger estimated that only 40% of the water meters in service across the u.s. have been converted to so-called ami (advanced metering infrastructure) systems, which boast two-way communications capability and, therefore, obviate the need for field technicians to manually read meters.over the next several years, conversions should only increase, as utilities are facing retirements by a large cohort of older meter men and women in the field and replacing a majority of them with ami capability is cost effective. helping utilities remove toxic ‘forever’ chemicals from drinking water represents an additional opportunity for technology providers like badger.
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still, the company has so far opted not to pursue the business.furthermore, the push to do so is arguably less pressing these days, given recent rollbacks in epa mandates.
source: company earnings report, 2026
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What could go wrong
the risk here is specific, not abstract: BMI trades like the AMI upgrade cycle stays healthy, margins stay clean, and investors keep rewarding predictability. if one of those slips, the stock does not have much extra cushion.
med
AMI conversion pace slows
BMI's best runway comes from utilities moving from manual reads to connected systems. if budget cycles slip or upgrade projects get delayed, the growth story cools fast.
with revenue up 10.9% last year and the next quarter modeled for 8% growth, another step down would make 38.2x earnings look less like quality pricing and more like wishful pricing.
med
premium multiple, normal business
this is a good business, but the stock already knows that. 17.5% return on capital is solid. 38.2x trailing p/e assumes the market keeps treating that solidity as scarce.
even if operations stay fine, multiple compression can do damage before the business gives you a clean fundamental warning.
med
single-lane concentration
all $0.9B of revenue sits in one operating lane: flow measurement and control. that simplicity is nice until one end market pauses.
you do not have another segment waiting to offset weaker municipal or utility demand. the same concentration that makes the story easy to follow also makes misses harder to diversify away.
what would break the premium case: revenue growth falling below the current 8% quarterly pace while gross margin drops below 42.1%. at that point, the stock is still priced for a cleaner story than the numbers would support.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
42.1% gross margin
this is the quality number. if margins stay here while revenue grows, the premium setup holds together.
trend
revenue growth slowing from 10.9% to 8%
last year's full-company growth was +10.9%. the current quarter setup is +8%. watch which number becomes the new normal.
next print
Q4 estimate of $1.29 EPS
for a stock with 95/100 predictability, even a small miss matters more than usual because investors expect boring precision.
ownership
219 buyers vs. 289 sellers
institutions were net sellers in 3q2025. not panic. just a reminder that big money has not been uniformly leaning in at this price.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts think this is moving pretty much with the pack.
risk profile
average
stability score 3 — neither unusually safe nor unusually fragile.
chart momentum
below average
technical score 4 — the chart is not giving you much help right now.
earnings predictability
95 / 100
management's numbers tend to arrive close to expectations. that lowers drama, not valuation risk.
source: institutional data
Institutional activity
219 buyers vs. 289 sellers in 3q2025. total institutional holdings: 28.3M shares.
source: institutional data
Price targets
3-5 year target range
$152
$311
$183
current price
$232
target midpoint · +27% from current · 3-5yr high: $365 (+100% · 19% ann'l return)
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