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 - Badger Meter Inc (NYSE:BMI) is highlighted as a promising small-cap stock, benefiting from the growth in water utility infrastructure and technological advancements in flow measurement solutions [1][2] Company Overview - Badger Meter Inc specializes in flow measurement, quality, and control solutions, primarily for water utilities [1] - The company has a strong balance sheet with $295 million in cash and no debt, indicating financial stability [2] Growth Metrics - Badger Meter has achieved a compound annual growth rate (CAGR) of 14% in revenue over the last five years, significantly outpacing the industry average growth of single digits [2] - The company generated $827 million in revenue in 2024 and operates in a total addressable market estimated to be around $20 billion [2] Technological Advancements - The company enhances traditional monitoring systems by integrating advanced technology, improving the accuracy and capabilities of its meters [2] - Badger Meter's technology includes optimized data transmission from meters, sensors for monitoring water pressure, leak detection, and in-line water quality testing [2] Market Position - Badger Meter is well-positioned in the market due to the ongoing replacement of aging conventional meters in water system infrastructure [2]