BMI Q4 Deep Dive: Project Pacing and New Smart Water Initiatives Shape Outlook

What Happened?

Shares of water control and measure company Badger Meter fell 15.2% in the afternoon session after the company reported fourth-quarter revenue that fell short of Wall Street expectations, overshadowing an earnings beat. 

The water control and measurement company's sales rose 7.6% year-over-year to $220.7 million, but this figure missed analyst estimates of $232 million. Despite the top-line shortfall, Badger Meter posted a GAAP profit of $1.14 per share, which was 1.5% above the consensus forecast and up from $1.04 in the same quarter last year. However, investors appeared to focus on the significant revenue miss, sending the shares down sharply and indicating that the stronger-than-expected profitability was not enough to offset concerns about the company's sales performance.

What Is The Market Telling Us

Badger Meter’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Badger Meter and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 2 days ago when the stock gained 2.5% on the news that analysts at Deutsche Bank highlighted the company as being well-positioned for 2026. 

The commentary came as part of a broader note on water technology stocks, which the bank noted had underperformed the wider market in 2025. According to the bank's analysts, this created an attractive entry point for investors. They viewed the sector as a "chicken cyclical" play, meaning it offered both the chance for a recovery and advantages from long-term growth. Specifically regarding Badger Meter, the bank stated that despite the stock lagging in the previous year, the company remained in a good position moving forward.

Badger Meter is down 20.8% since the beginning of the year, and at $139.68 per share, it is trading 45% below its 52-week high of $254.17 from June 2025. Investors who bought $1,000 worth of Badger Meter’s shares 5 years ago would now be looking at an investment worth $1,445.

Water control and measure company Badger Meter missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 7.6% year on year to $220.7 million. Its GAAP profit of $1.14 per share was 1.5% above analysts’ consensus estimates.

Badger Meter (BMI) Q4 CY2025 Highlights:

• Revenue: $220.7 million vs analyst estimates of $232 million (7.6% year-on-year growth, 4.9% miss)
• EPS (GAAP): $1.14 vs analyst estimates of $1.12 (1.5% beat)
• Operating Margin: 19.5%, in line with the same quarter last year
• Free Cash Flow Margin: 23%, similar to the same quarter last year
• Market Capitalization: $4.85 billion

MILWAUKEE--(BUSINESS WIRE)--Badger Meter, Inc. , a global leader in smart water management solutions, today announced a series of executive leadership changes effective January 1, 2026. Ken Bockhorst, Chairman, President and Chief Executive Officer, stated: “I am excited to announce key executive leadership changes that align our strategic priorities with a management structure designed to expand our market leadership in cellular Advanced Metering Infrastructure (AMI), while growing...

Company Overview

The developer of the world’s first frost-proof water meter in 1905, Badger Meter provides water control and measure equipment to various industries.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Badger Meter grew its sales at an incredible 16.6% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Badger Meter’s annualized revenue growth of 14.1% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Badger Meter’s revenue grew by 7.6% year on year to $220.7 million, missing Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 9.7% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is noteworthy and suggests the market is forecasting success for its products and services.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Badger Meter has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 17.8%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Badger Meter’s operating margin rose by 4.4 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Badger Meter generated an operating margin profit margin of 19.5%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Badger Meter’s EPS grew at an astounding 23.2% compounded annual growth rate over the last five years, higher than its 16.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Badger Meter’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Badger Meter’s operating margin was flat this quarter but expanded by 4.4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Badger Meter, its two-year annual EPS growth of 23.5% is similar to its five-year trend, implying strong and stable earnings power.

In Q4, Badger Meter reported EPS of $1.14, up from $1.04 in the same quarter last year. This print beat analysts’ estimates by 1.5%. Over the next 12 months, Wall Street expects Badger Meter’s full-year EPS of $4.79 to grow 10.6%.

Key Takeaways from Badger Meter’s Q4 Results

Revenue missed by a fairly large amount. Despite an EPS, we think that overall, this quarter could have been better. The stock traded down 6.9% to $153 immediately following the results.

Badger Meter didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).

Water control and measure company Badger Meter will be announcing earnings results this Wednesday before the bell. Here’s what to look for.

Badger Meter beat analysts’ revenue expectations by 1.8% last quarter, reporting revenues of $235.7 million, up 13.1% year on year. It was an exceptional quarter for the company, with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

Is Badger Meter a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Badger Meter’s revenue to grow 13.1% year on year to $232 million, in line with the 12.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.16 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Badger Meter has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Badger Meter’s peers in the electrical equipment segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Teledyne delivered year-on-year revenue growth of 7.3%, beating analysts’ expectations by 2.5%, and LSI reported flat revenue, topping estimates by 4.9%. Teledyne traded up 9.8% following the results while LSI was also up 8.6%.

Read our full analysis of Teledyne’s results here and LSI’s results here.

There has been positive sentiment among investors in the electrical equipment segment, with share prices up 8.7% on average over the last month. Badger Meter is down 3.4% during the same time and is heading into earnings with an average analyst price target of $211.30 (compared to the current share price of $173.72).

What Happened?

Shares of water control and measure company Badger Meter jumped 2.5% in the afternoon session after analysts at Deutsche Bank highlighted the company as being well-positioned for 2026. 

The commentary came as part of a broader note on water technology stocks, which the bank noted had underperformed the wider market in 2025. According to the bank's analysts, this created an attractive entry point for investors. They viewed the sector as a "chicken cyclical" play, meaning it offered both the chance for a recovery and advantages from long-term growth. Specifically regarding Badger Meter, the bank stated that despite the stock lagging in the previous year, the company remained in a good position moving forward.

After the initial pop the shares cooled down to $174.31, up 2.8% from previous close.

What Is The Market Telling Us

Badger Meter’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 14.2% on the news that the company reported second-quarter earnings that fell short of Wall Street expectations. 

Badger Meter announced second-quarter earnings per share (EPS) of $1.17, which missed the average analyst estimate of $1.21 per share. While total sales for the quarter rose 10% year-over-year to $238.1 million, beating forecasts, the earnings miss appeared to weigh on investor sentiment., The company noted that while utility water sales increased by 11%, driven by demand for its smart water solutions and the recent SmartCover acquisition, sales of its flow instrumentation products were flat compared to the prior year. Additionally, operating profit margins saw a slight decrease from 19.2% to 18.8% year-over-year, and the company's tax rate increased.

Badger Meter is down 1.2% since the beginning of the year, and at $174.31 per share, it is trading 31.4% below its 52-week high of $254.17 from June 2025. Investors who bought $1,000 worth of Badger Meter’s shares 5 years ago would now be looking at an investment worth $1,722.