Financial Data and Key Metrics Changes - Total sales for Q4 2025 reached $221 million, an 8% year-over-year increase, with base sales growth of 2% [6] - Operating earnings grew by 10% year-over-year, with operating profit margins increasing by 40 basis points to 19.5% [9] - Consolidated EPS was $1.14, a 10% increase from $1.04 in the prior year quarter [12] - Record quarterly free cash flow of $50.8 million, up approximately $3.4 million year-over-year [12] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 9% year-over-year, or 2% excluding SmartCover [6] - Flow instrumentation product line sales were flat year-over-year, with modest growth in water-focused end markets [9] - SmartCover generated $40 million in sales for 2025, representing a 25% annualized growth [21] Market Data and Key Metrics Changes - The U.S. market for meters is approximately 6 million units per year, with Badger Meter holding about 30% market share [35] - 85% of the U.S. market is replacement-driven, indicating a stable demand for Badger Meter's products [63] Company Strategy and Development Direction - The company aims to leverage its cellular AMI technology as a foundation for real-time insights and analytics, expanding through the Blue Edge suite of smart water management solutions [14] - The PRASA AMI project is expected to be one of the largest deployments globally, with a focus on E-Series ultrasonic meters and ORION cellular AMI radios [15] - The company is committed to maintaining a clean balance sheet with over $225 million in cash, allowing for organic and inorganic growth investments [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit sales growth over the next five years, despite potential project pacing dynamics in 2026 [24] - The company does not foresee significant impacts from federal funding constraints on its growth trajectory [23] - Management highlighted the importance of long-term trends in the water industry, which support demand for smart water management solutions [22] Other Important Information - The company successfully integrated SmartCover into its operations, with expectations for earnings accretion in 2026 [21] - SG&A expenses in Q4 were $49.9 million, with a year-over-year increase primarily due to the SmartCover acquisition [11] Q&A Session Summary Question: Did the company see the full impact of project conclusions in Q4? - Management noted that project pacing can vary, and the second half of the year was expected to show lower growth due to fewer working days and project completions [27][28] Question: What is the expected growth rate for 2026? - Management anticipates a lower growth rate in the first half of 2026, with a higher growth rate expected in the second half due to awarded projects [30][31] Question: How does the company view the U.S. market size and its share? - Management confirmed that the U.S. market size is around 6 million meters per year, with Badger Meter's share remaining approximately 30% [35][38] Question: What is the expected impact of the PRASA project on revenue? - Management refrained from sizing the revenue impact of the PRASA project, emphasizing the variability in project deployment timelines [18][19] Question: How does the company manage pricing in relation to tariffs? - Management indicated that pricing adjustments have primarily been through list price increases, without temporary tariff add-ons, maintaining a clean pricing strategy [56][57]

Badger Meter Fourth Quarter & Full Year 2025 Financial Results January 28, 2026 1 Forward Looking Statements 2 Durable Demand For Smart Water Solutions in 2025 Drove Profitable Growth and Robust Cash Generation FY 13% 10% 5% 8% 2% 3% 5% 5% 6% 0% 2% 4% 6% 8% 10% 12% 14% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Base SmartCover 13% 13% 10% 8% 19.1% 20.0% 21.1% As Reported OP Margin FY 2024 As Reported OP Margin FY 2025 Base Operating Profit Margin FY 2025 19.1% 19.5% 20.5% As Reported OP Margin Q4 2024 As Repor ...

Badger Meter (BMI) came out with quarterly earnings of $1.14 per share, missing the Zacks Consensus Estimate of $1.15 per share. This compares to earnings of $1.04 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -0.78%. A quarter ago, it was expected that this manufacturer of products that measure gas and water flow would post earnings of $1.11 per share when it actually produced earnings of $1.19, delivering a surprise of +7. ...

Core Insights - Badger Meter, Inc. reported record sales, profitability, and cash flow for the full year 2025, driven by sustained demand for smart water management solutions [2][11] - The acquisition of SmartCover in early 2025 expanded Badger Meter's capabilities in sewer monitoring and stormwater management, positioning the company for long-term growth [3][11] Fourth Quarter 2025 Highlights - Utility water sales increased by 9% year-over-year, or 2% excluding SmartCover, with growth driven by customer adoption of digital smart water solutions [5][9] - Operating earnings rose by 10% year-over-year to $43.0 million, with operating profit margins expanding to 19.5% [7][9] - Total sales reached $220.7 million, an 8% increase from $205.2 million in the prior year [9][10] Full Year 2025 Highlights - Record sales of $916.7 million, up 11% from $826.6 million in 2024, with base sales increasing by 6% year-over-year [9][11] - Operating earnings for the year increased by 16% to $183.4 million, with operating profit margins at 20.0% [9][11] - Diluted earnings per share (EPS) increased by 13% to $4.79, compared to $4.23 in 2024 [9][11] Strategic Initiatives - The company emphasized the importance of its BlueEdge suite of smart water management solutions, which addresses various challenges across the water cycle [12][13] - Badger Meter's selection for the Puerto Rico Aqueduct and Sewer Authority's AMI project highlights its capabilities in enhancing water system resiliency [14] Financial Performance - Gross margin improved to 42.1%, benefiting from a favorable sales mix and lower pass-through revenue [7][9] - Cash provided by operations reached $54.8 million in Q4 2025 and $183.7 million for the full year [9][11] Outlook - The company anticipates high single-digit sales growth and operating profit margin expansion over the next five years, driven by the adoption of cellular AMI solutions and international expansion opportunities [15][16]

Core Viewpoint - Badger Meter, Inc. is a key player in the flow measurement and control solutions industry, focusing on smart water technology and aiming to dominate the market by 2026 [1][4]. Price Target Trends - The consensus price target for Badger Meter has decreased from $215.92 to $157 over the past year, indicating a more conservative outlook from analysts [2][6]. - Analyst Kristina Ruggeri from Argus Research has set a bullish price target of $218, reflecting confidence in the company's growth potential [3][6]. Strategic Focus - Badger Meter is concentrating on transitioning its existing client base to innovative smart water technology products, which are designed to generate recurring revenue [3][4][6]. - The company is making strong initial efforts to encourage clients to adopt new offerings, although a significant portion has yet to make the switch [4][6]. Upcoming Earnings Report - Badger Meter's fourth quarter and full year 2025 earnings report is scheduled for release on January 28, 2026, which will provide insights into its performance and future prospects [5].

Core Viewpoint - The article presents a bearish perspective on Badger Meter (BMI), suggesting that the stock is "priced to perfection" and may not offer value at current levels [1]. Company Analysis - Badger Meter has been under scrutiny for its stock valuation, with the author expressing concerns about its pricing relative to performance metrics [1]. Market Context - The author emphasizes the importance of understanding equity markets and their performance, indicating a broader analytical approach to investment [1].

Core Insights - Badger Meter is positioned as a leader in the North American smart-water technology market, with significant growth potential as it transitions its client base to advanced metering infrastructure (AMI) [3][4] - The company is leveraging strategic acquisitions, such as the $185 million purchase of SmartCover, to enhance its product offerings and expand its client base [6][7] - Badger Meter's commitment to sustainability and efficient water use aligns with global trends, making it a compelling investment opportunity [9] Growth Pathways - Only 40% of Badger's connection points have transitioned to AMI, indicating substantial room for growth as customers upgrade their metering and monitoring equipment [3] - New capabilities in Badger's platform, including real-time water quality monitoring and high-frequency pressure monitoring, are expected to drive greater adoption among utility users [4] - The company aims to expand its international presence, particularly in Europe and the Middle East, by offering customized solutions [4] Strategic Acquisitions - The acquisition of SmartCover allows Badger to tap into the wastewater treatment sector and create cross-selling opportunities with existing customers [6][7] - This strategic move is expected to strengthen Badger's market position and enhance its growth trajectory [7] Financial Performance - Badger Meter has a market capitalization of $5.1 billion, with a gross margin of 41.26% and a dividend yield of 0.85% [6] - The company has a history of consistent dividend increases, with an 18% hike in August 2025 marking the 33rd consecutive year of annual increases [10] Investment Perspective - The Voyager Portfolio views Badger Meter as a long-term investment opportunity, anticipating that the company's growth will unfold over years or decades [8][11] - The increasing global demand for efficient water use positions Badger Meter favorably in the market, especially as water supply concerns become more pressing [9]

Company Performance - Badger Meter (BMI) closed at $181.26, reflecting a -1.03% change from the previous day, underperforming the S&P 500 which gained 0.46% [1] - Over the last month, Badger Meter's shares increased by 2.99%, lagging behind the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 4.22% [2] - The upcoming earnings per share (EPS) is projected at $1.14, indicating a 9.62% increase year-over-year, with revenue expected to be $231.61 million, a 12.88% increase compared to the same quarter last year [3] - For the full year, earnings are projected at $4.79 per share and revenue at $927.59 million, representing increases of +13.24% and +12.22% respectively from the prior year [4] Analyst Insights - Recent revisions to analyst forecasts for Badger Meter should be monitored, as they reflect near-term business trends and analysts' confidence in the company's profitability [5] - The Zacks Rank system, which evaluates estimate changes, currently ranks Badger Meter at 4 (Sell), with the consensus EPS estimate having decreased by 0.13% over the past month [6][7] Valuation Metrics - Badger Meter is trading at a Forward P/E ratio of 38.22, which is a premium compared to the industry average Forward P/E of 24.25 [8] - The company has a PEG ratio of 3.02, higher than the industry average PEG ratio of 2.18, indicating a higher valuation relative to expected earnings growth [8] Industry Context - The Instruments - Control industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 102, placing it in the top 42% of over 250 industries [9]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Badger Meter (BMI), and highlights the potential misalignment of interests between brokerage firms and retail investors [1][5]. Brokerage Recommendations - Badger Meter has an average brokerage recommendation (ABR) of 1.92, indicating a position between Strong Buy and Buy, based on recommendations from 12 brokerage firms [2]. - Of the 12 recommendations, six are classified as Strong Buy and one as Buy, representing 50% and 8.3% of total recommendations respectively [2]. Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be advisable, as studies suggest they often fail to guide investors effectively towards stocks with high price appreciation potential [5]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell" [6]. Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) and is considered a more effective indicator of near-term stock performance [8]. - The Zacks Rank is based on earnings estimate revisions, which are strongly correlated with stock price movements, unlike the ABR which may not be timely [12][13]. Current Earnings Estimates for Badger Meter - The Zacks Consensus Estimate for Badger Meter's current year earnings has decreased by 0.1% over the past month to $4.79, reflecting analysts' growing pessimism about the company's earnings prospects [14]. - This decline in consensus estimates has resulted in a Zacks Rank 4 (Sell) for Badger Meter, suggesting caution despite the Buy-equivalent ABR [15].

Core Viewpoint - Badger Meter, Inc. is implementing executive leadership changes to align with strategic priorities and enhance market leadership in cellular Advanced Metering Infrastructure (AMI) [1] Group 1: Executive Leadership Changes - The changes will take effect on January 1, 2026 [1] - Ken Bockhorst, the current Chairman, President, and CEO, expressed excitement about the new management structure [1]