Core Viewpoint - Badger Meter (BMI) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance Indicators - For the fiscal year ending December 2025, Badger Meter is expected to earn $4.80 per share, with a 1.7% increase in the Zacks Consensus Estimate over the past three months [8]. - The upgrade reflects an improvement in Badger Meter's underlying business, suggesting that investors may push the stock price higher due to this positive trend [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Badger Meter's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Company Overview - Badger Meter specializes in flow measurement and analytics solutions for water utilities and industrial clients globally, with a revenue growth of 13% in the third quarter [1][10] - The company provides a range of products including mechanical and static water meters, radio and software technologies, and flow instrumentation [4][6] - Badger Meter's revenue is primarily generated from proprietary hardware, software, and cloud-based analytics, with opportunities for recurring service and technology upgrades [4][6] Financial Performance - As of November 25, 2025, Badger Meter's stock price was $182.60, reflecting a 16.5% decline over the past year, underperforming the S&P 500 by 30.1 percentage points [3] - The company's market capitalization stands at $5.3 billion, with a trailing twelve months (TTM) revenue of $901.11 million and a net income of $138.8 million [3] Recent Developments - Badger Meter's stock experienced a significant drop in July due to disappointing second-quarter results, and it has not fully recovered despite strong third-quarter performance [9][10] - The company announced an 18% increase in its annual dividend rate, indicating confidence in its financial health [10] - CEO Kenneth C. Bockhorst highlighted strong demand for the company's cellular AMI and BlueEdge™ smart water management solutions, despite facing macroeconomic and policy challenges [10] Market Position - Badger Meter is recognized as a leading provider of flow measurement and control technologies, leveraging its proprietary hardware and cloud-based analytics to support efficient resource management for water utilities and industrial clients [6] - The company serves a diverse customer base, including municipal water utilities, industrial markets, and original equipment manufacturers both in the U.S. and internationally [5][6]

Core Viewpoint - Badger Meter, Inc. (NYSE:BMI) is recognized as one of the 15 best stocks to buy for the medium term, highlighting its potential for growth and shareholder returns [1]. Dividend and Share Repurchase - Badger Meter declared a quarterly cash dividend of $0.40 per share, payable on December 5, 2025, to shareholders of record on November 21, 2025 [2]. - The Board approved a new share repurchase program authorizing up to $75 million of the company's outstanding common stock through November 30, 2028, replacing the previous authorization from February 2023 [3]. Management Insights - Kenneth C. Bockhorst, the Chairman, President, and CEO, emphasized the company's strong balance sheet, free cash flow generation, and durable business model, which position it well to capitalize on industry growth trends [4]. - The company has a history of returning capital to shareholders through dividend growth for 33 consecutive years, indicating a commitment to enhancing long-term shareholder value [4]. Business Overview - Badger Meter develops and manufactures smart water solutions that measure, control, and manage the flow of water and other liquids through pipes, indicating its role in the water management industry [4].

Core Viewpoint - Badger Meter's recent earnings report indicates strong performance, with earnings per share surpassing estimates and significant revenue growth, despite ongoing macroeconomic challenges [3][4][12]. Financial Performance - Badger Meter reported Q3 2025 earnings per share of $1.19, exceeding the Zacks Consensus Estimate by 7.2% and up from $1.08 in the same quarter last year [3]. - Quarterly net sales reached $235.7 million, a 13.1% increase from $208.4 million year-over-year, driven by higher utility water sales [3]. - Gross profit for the quarter was $95.8 million, up from $83.9 million in the prior-year quarter, with a gross margin of 40.7%, reflecting a 50 basis point improvement year-over-year [7]. Segmental Performance - Utility water sales increased by 14% year-over-year, with an 8% rise even when excluding SmartCover, driven by higher ultrasonic meter volumes and increased demand for BEACON Software-as-a-Service [6]. - Flow instrumentation sales grew by 4% year-over-year, supported by strength in water-related markets [6]. Cash Flow and Liquidity - The company generated $51.3 million in net cash from operating activities in Q3 2025, compared to $45.1 million a year ago [10]. - As of September 30, 2025, Badger Meter had $201.7 million in cash and cash equivalents, up from $165.2 million as of June 30, 2025 [10]. Strategic Outlook - The company is optimistic about long-term growth prospects, expecting an average high single-digit top-line growth rate over the next five years, driven by technology adoption and strategic pricing initiatives [12]. - Badger Meter has raised its normalized gross margin range to 39%–42%, positioning itself well for innovation and value-driven acquisitions [13]. Market Reaction - Following the earnings release, there has been an upward trend in fresh estimates for Badger Meter, indicating positive market sentiment [14][16]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [16].

Core Viewpoint - Wall Street analysts' recommendations significantly influence investor decisions, but their reliability is questionable due to potential biases stemming from brokerage firms' vested interests [1][6][10]. Group 1: Brokerage Recommendations - Badger Meter (BMI) has an average brokerage recommendation (ABR) of 2.00, indicating a "Buy" based on 11 brokerage firms' recommendations [2]. - Among the 11 recommendations, five are classified as "Strong Buy" and one as "Buy," accounting for 45.5% and 9.1% of total recommendations, respectively [2]. Group 2: Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors toward stocks with the highest price increase potential [5]. - Analysts often exhibit a strong positive bias in their ratings due to the interests of the brokerage firms, leading to a disproportionate number of "Strong Buy" recommendations compared to "Strong Sell" [6][10]. Group 3: Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, making it a more reliable indicator of near-term stock performance [8][11]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates and business trends [12]. Group 4: Current Earnings Estimates for Badger Meter - The Zacks Consensus Estimate for Badger Meter has increased by 2.2% over the past month to $4.8, indicating growing optimism among analysts regarding the company's earnings prospects [13]. - The recent change in consensus estimates, along with other factors, has resulted in a Zacks Rank of 2 (Buy) for Badger Meter, suggesting a favorable investment outlook [14].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Points - Badger Meter, Inc. declared a regular quarterly cash dividend of $0.40 per share, marking an 18% increase from the previous $0.34 per share, payable on December 5, 2025 [1][12] - The Board approved a new share repurchase authorization for up to $75 million of the Company's outstanding common stock through November 30, 2028, replacing the previous authorization [2][3] - The company has a history of returning capital to shareholders, with 33 consecutive years of dividend growth, and aims to enhance long-term shareholder value through opportunistic buybacks [4] Financial Performance - For the third quarter of 2025, Badger Meter reported total sales of $235.7 million, a 13% increase from $208.4 million in the prior year [8] - Base sales reached $224.5 million, reflecting an 8% year-over-year increase, while operating earnings rose 13% to $46.1 million [8] Business Strategy - The company emphasizes a disciplined capital allocation framework, which has historically benefited both the company and its shareholders [4] - The new share repurchase program allows for flexibility in purchasing shares based on market conditions and other factors [3]

Core Insights - October was a challenging month for stock selection, with the 15 selected stocks experiencing an average decline of 0.41% in value [1]. Group 1 - The SPDR S&P 500 Trust ETF was referenced, indicating a broader market context for the stock performance [1]. - The analyst has over 10 years of experience in the investment field, starting as an analyst and advancing to a management role [1]. - Dividend investing is highlighted as a personal interest of the analyst, suggesting a focus on income-generating investments [1].

Core Insights - Badger Meter, Inc. (NYSE:BMI) is recognized as a high-quality company with strong operational performance and potential for profit margin expansion in an attractive industry [2][3] - The company has demonstrated consistent growth, with sales and free cash flow increasing by 15% and 16% respectively over the past five years, while dividends have been raised by 14% [2] - Badger Meter's BlueEdge solution aims to modernize outdated mechanical systems used by US water and sewer utilities, positioning the company to benefit from long-term industry trends [3] Dividend Performance - On August 11, Badger Meter raised its quarterly dividend by 17.6% to $0.40 per share, marking 33 consecutive years of dividend growth [4] - As of October 28, the stock offers a dividend yield of 0.87%, making it appealing for income-focused investors [4] Strategic Acquisitions - The company has a strong history of strategic acquisitions, having acquired 14 companies since 2010, which has further strengthened its market position [3]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks based on value, growth, and momentum characteristics, assigning ratings from A to F, with A indicating the highest potential for outperformance [3] - Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Cash Flow [3] - Growth Score evaluates stocks based on projected earnings and sales growth, targeting companies with strong financial health [4] - Momentum Score assesses stocks based on price trends and earnings estimate changes, helping investors capitalize on upward or downward movements [5] - VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth, and momentum [6] Zacks Rank and Style Scores Interaction - The Zacks Rank utilizes earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.93% since 1988 [7] - There are over 800 stocks rated as 1 or 2, making it essential for investors to use Style Scores to narrow down their choices [8] - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - The direction of earnings estimate revisions is crucial; stocks with lower ranks and declining forecasts pose higher risks despite good Style Scores [10] Company Spotlight: Badger Meter - Badger Meter, established in 1905 and based in Milwaukee, WI, specializes in water solutions, including flow measurement and quality monitoring [11] - The company holds a Zacks Rank of 2 (Buy) and has a VGM Score of B, indicating strong growth potential [12] - Badger Meter is projected to achieve year-over-year earnings growth of 13.5% for the current fiscal year, with recent upward revisions in earnings estimates [12] - With a solid Zacks Rank and favorable Style Scores, Badger Meter is recommended for investors seeking growth opportunities [13]