Core Viewpoint - Sensata (ST) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Sensata, the recent increase in earnings estimates suggests an improvement in the company's underlying business, likely leading to higher stock prices as investor sentiment shifts positively [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - Sensata's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [9][10]. Earnings Estimate Revisions for Sensata - For the fiscal year ending December 2025, Sensata is expected to earn $3.37 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.3% over the past three months, reflecting analysts' growing optimism [8].

Financial Data and Key Metrics Changes - Revenue for the third quarter was $2.88 billion, exceeding expectations, up 9% sequentially and 25% year over year [15][21] - Gross margin was 69.2% and operating margin was 42.2%, both up 100 basis points sequentially and year over year [18] - EPS was $2.50, above the high end of the guided range, and up 30% year over year [18] Business Line Data and Key Metrics Changes - Industrial represented 45% of revenue, up 12% sequentially and 23% year over year, with growth across all subsectors and regions [15][16] - Automotive accounted for 30% of revenue, down 1% sequentially but up 22% year over year [16] - Communications made up 13% of revenue, up 18% sequentially and 40% year over year [16] - Consumer also represented 13% of revenue, up 16% sequentially and 21% year over year, marking the fourth consecutive quarter of double-digit year-over-year growth [17] Market Data and Key Metrics Changes - The industrial automation business is expected to see long-term expansion driven by economic and demographic pressures [6][11] - The robotics market is predicted to experience robust double-digit growth due to AI-enabled technology factors [7][11] Company Strategy and Development Direction - The company is focused on innovation and building ecosystem partnerships to enhance customer collaborations [8][12] - Investments are being made in application-specific solutions that integrate multiple sensing modalities [12] - The strategy emphasizes tackling innovation challenges at the intelligent physical edge [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating geopolitical and macroeconomic uncertainties due to a diversified business model [5][21] - The outlook for continued growth, especially in the industrial market, is strong, with expectations for fiscal 2025 to close as a recovery year [21] Other Important Information - Cash and short-term investments totaled $3.5 billion, with a net leverage ratio of 1.1 [18][19] - Free cash flow over the trailing twelve months was $3.7 billion, or 35% of revenue [20] Q&A Session Summary Question: Industrial growth and inventory levels - Management indicated that industrial growth has been strong and is expected to continue, with channel inventories remaining lean and end demand still below consumption [25][26] Question: Gross margin expectations - Management acknowledged lower gross margins due to unexpected lower utilization but expects to return to 70% margins in Q4 [30][31] Question: Automation revenue growth - The automation business is projected to double in size by 2029, driven by R&D and new modalities [36] Question: Automotive market performance - Automotive revenue is expected to decline in Q4 due to unwinding of pull-ins, but overall performance remains strong [46][48] Question: Supply constraints in aerospace and defense - Management noted surging demand in aerospace and defense, leading to supply limitations, but is actively increasing capacity [66][68]

Core Viewpoint - Sensata (ST) is anticipated to report a year-over-year decline in earnings and revenues for the quarter ended June 2025, which could significantly influence its stock price depending on the actual results compared to estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for July 29, and if the results exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2]. - The Zacks Consensus Estimate predicts quarterly earnings of $0.84 per share, reflecting a year-over-year decrease of 9.7%, with revenues expected to be $933.26 million, down 9.9% from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 1.55% higher, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Sensata is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.27%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Sensata currently holds a Zacks Rank of 2, which, along with the positive Earnings ESP, suggests a high likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Sensata exceeded the expected earnings of $0.72 per share by delivering $0.78, resulting in a surprise of +8.33% [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14]. Conclusion - While Sensata is positioned as a compelling earnings-beat candidate, other factors should also be considered when evaluating the stock ahead of its earnings release [17].

Core Viewpoint - Badger Meter reported quarterly earnings of $1.17 per share, missing the Zacks Consensus Estimate of $1.21 per share, but showing an increase from $1.12 per share a year ago [1][2] Financial Performance - The company posted revenues of $238.1 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.61% and increasing from $216.66 million year-over-year [3] - Badger Meter has surpassed consensus revenue estimates three times over the last four quarters [3] Stock Performance - Badger Meter shares have increased approximately 15.6% since the beginning of the year, compared to a 7.2% gain in the S&P 500 [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.22 on revenues of $234.97 million, and for the current fiscal year, it is $4.93 on revenues of $924.92 million [8] - The estimate revisions trend for Badger Meter was mixed ahead of the earnings release, which may change following the recent report [7] Industry Context - The Instruments - Control industry, to which Badger Meter belongs, is currently in the top 11% of over 250 Zacks industries, indicating a favorable outlook [9]