Track market-moving stories before they get noisy

Shares of leading smart water metering solutions provider Bader Meter (BMI +2.80%) are down 18% this week as of 1 p.m. ET on Friday after the company reported mixed second-quarter earnings on Wednesday. Sales and earnings per share dropped 7% and 13%, respectively, which ever-so-slightly top Wall Street's low expectations. However, despite sneaking past analysts' hopes, the stock still sold off, as the market had hoped for a bigger potential rebound in the second half of the year but only got "flattish" sales growth guidance for 2026.

Badger Meter stock is down 34% over the last year, but I view this as more of a buying opportunity than a major concern for a couple of reasons.

Today's Change

(

2.80

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3.45

Current Price

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126.65

First, Badger Meter was priced for perfection throughout most of the last five years, trading at an average of 42 times free cash flow (FCF). Its sales growth temporarily stalled and turned negative, leaving the company trading at a much more reasonable 24 times FCF.

Image source: Getty Images.

Second -- and while a shift from sales doubling between 2020 and 2025 to two straight quarters of declining revenue might seem jarring -- it shouldn't prove to be a long-term issue for Badger Meter. Instead, it seems to be a culmination of unfortunate timing issues (linked to government budgetary issues or delays) that have resulted in nine major utility projects being slated for deployment in the second half of 2026. Once these deployments take hold, Badger Meter's sequential sales growth should extend into the coming quarters, and investors should monitor it to ensure it happens.

Zooming out and removing this year's cyclicality and timing issues, Badger Meter's overall investment thesis remains in place, in my opinion. Water and metering infrastructure throughout the U.S. (and in many parts of the world where the company is expanding) need to not only be replaced but also often updated with Badger's advanced metering infrastructure.

Growing its dividend for 21 consecutive years while delivering 13% annualized total returns over the same period, Badger Meter remains an elite, steady-Eddie compounder, finally trading at a very reasonable price again.

Josh Kohn-Lindquist has positions in Badger Meter. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Philadelphia, Pennsylvania--(Newsfile Corp. - July 16, 2026) - National plaintiffs' law firm Berger Montague PC announces a class action lawsuit against Badger Meter, Inc. (NYSE: BMI) ("Badger Meter" or the "Company") on behalf of investors who purchased or acquired Badger Meter common stock during the period from April 18, 2024 through April 16, 2026 (the "Class Period").

Investor Deadline: Investors who purchased or acquired Badger Meter common stock during the Class Period may, no later than August 3, 2026, seek to be appointed as a lead plaintiff representative of the class. To learn your rights, CLICK HERE.

Milwaukee, Wis.-based Badger Meter provides flow measurement, water quality monitoring, and control solutions to water utilities, municipalities, and industrial customers across the world.

The complaint alleges that Defendants failed to disclose that: (i) Badger Meter's reported financial results during the Class Period were at least partially the product of pulling forward customer orders to recognize revenue early, rather than the organic demand growth they described; and (ii) this revenue-acceleration practice was masking deteriorating near-term order trends and consuming revenue that would otherwise have supported future periods.

On July 22, 2025, Badger Meter's second-quarter 2025 results fell below consensus estimates, with decelerating revenue growth and narrowing margins. Management guided to a sequential sales decline in the third quarter of 2025 while dismissing the weakness as ordinary business variability. On this news, shares dropped 16.5%, falling $40.42 per share to close at $204.80 per share on July 22, 2025.

On January 28, 2026, Badger Meter's fourth-quarter 2025 results again disappointed, with revenues missing expectations and utility water sales posting a 6% sequential decline. Management attributed the shortfall to project pacing dynamics it claimed had been previously communicated. On this news, shares fell approximately 11%, dropping $18.09 per share to close at $146.32 per share.

On April 17, 2026, Badger Meter disclosed first-quarter 2026 results reflecting significant year-over-year deterioration across all key metrics. Management newly attributed part of the weakness to softer short-cycle municipal demand and revealed that such demand variability existed throughout 2023 to 2025 but had gone undetected in reported results due to elevated backlog and active project work. On this news, shares fell more than 24%, declining $36.75 per share to close at $115.54 per share.

If you are a Badger Meter investor and would like to learn more about this action, CLICK HERE or please contact Berger Montague: Andrew Abramowitz at [email protected] or (215) 875-3015, or Caitlin Adorni at [email protected] or (267) 764-4865.

About Berger Montague
Berger Montague is one of the nation's preeminent law firms focusing on complex civil litigation, class actions, and mass torts in federal and state courts throughout the United States. With more than $2.4 billion in 2025 post-trial judgments alone, the Firm is a leader in the fields of complex litigation, antitrust, consumer protection, defective products, environmental law, employment law, securities, and whistleblower cases, among many other practice areas. For over 55 years, Berger Montague has played leading roles in precedent-setting cases and has recovered over $50 billion for its clients and the classes they have represented. Berger Montague is headquartered in Philadelphia and has offices in Chicago; Malvern, PA; Minneapolis; San Diego; San Francisco; Toronto, Canada; Washington, D.C., and Wilmington, DE.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/305372

Source: Berger Montague

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Badger Meter (BMI - Free Report) closed at $127.81 in the latest trading session, marking a -5.2% move from the prior day. This change lagged the S&P 500's 1.44% loss on the day. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq lost 2.22%.

The manufacturer of products that measure gas and water flow's stock has climbed by 7.14% in the past month, exceeding the Computer and Technology sector's gain of 0.98% and the S&P 500's gain of 0.08%.

Market participants will be closely following the financial results of Badger Meter in its upcoming release. In that report, analysts expect Badger Meter to post earnings of $1.01 per share. This would mark a year-over-year decline of 13.68%. Simultaneously, our latest consensus estimate expects the revenue to be $219.66 million, showing a 7.75% drop compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.51 per share and a revenue of $909.27 million, signifying shifts of -5.85% and -0.81%, respectively, from the last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Badger Meter. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.29% higher. Badger Meter is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Badger Meter has a Forward P/E ratio of 29.89 right now. Its industry sports an average Forward P/E of 29.89, so one might conclude that Badger Meter is trading at no noticeable deviation comparatively.

We can additionally observe that BMI currently boasts a PEG ratio of 2.42. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Instruments - Control industry had an average PEG ratio of 1.96.

The Instruments - Control industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.