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].

Group 1: Earnings Performance - Badger Meter reported quarterly earnings of $1.19 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, and up from $1.08 per share a year ago [1] - The earnings surprise for this quarter was +7.21%, while the previous quarter had a surprise of -3.31% with actual earnings of $1.17 compared to an expected $1.21 [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company posted revenues of $235.65 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.74%, and up from $208.44 million year-over-year [3] - Badger Meter has topped consensus revenue estimates four times over the last four quarters [3] Group 3: Stock Performance and Outlook - Badger Meter shares have declined approximately 11.7% since the beginning of the year, contrasting with the S&P 500's gain of 14.5% [4] - The current consensus EPS estimate for the upcoming quarter is $1.12 on revenues of $230.07 million, and for the current fiscal year, it is $4.69 on revenues of $919.67 million [8] Group 4: Industry Context - The Instruments - Control industry, to which Badger Meter belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, indicating potential challenges for stock performance [9] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [6]

Company Performance - Badger Meter (BMI) ended the recent trading session at $239.51, demonstrating a -1.28% change from the preceding day's closing price, trailing the S&P 500 which registered a daily loss of 0.79% [1] - Over the past month, shares of Badger Meter had lost 1.73%, lagging behind the Computer and Technology sector's gain of 7.88% and the S&P 500's gain of 5.22% [2] Earnings Projections - The company is scheduled to release its earnings on July 22, 2025, with projected earnings per share (EPS) of $1.19, reflecting a 6.25% increase from the same quarter last year, and expected revenue of $234.33 million, showing an 8.16% escalation compared to the year-ago quarter [3] - For the full year, Zacks Consensus Estimates project earnings of $4.91 per share and revenue of $924.92 million, representing changes of +16.08% and +11.9%, respectively, from the prior year [4] Analyst Estimates and Valuation - Recent changes to analyst estimates for Badger Meter reflect the latest short-term business trends, with upbeat changes indicating a favorable outlook on business health and profitability [5] - Badger Meter is currently trading at a Forward P/E ratio of 49.41, which is a premium compared to the industry average Forward P/E of 27.52 [8] Industry Context - The Instruments - Control industry, which includes Badger Meter, is part of the Computer and Technology sector and currently carries a Zacks Industry Rank of 201, placing it within the bottom 19% of over 250 industries [10]