Badger Meter (BMI) Gains 39.9% YTD: Will the Trend Continue?
Badger Meter, Inc BMI witnessed strong momentum year to date, with shares having gained 39.9% in the same time frame compared with the sub-industry’s growth of 26.6%
The company provides flow measurement, control and communications solutions, serving water and gas utilities, municipalities and industrial customers worldwide.
The company offers BEACON advanced metering analytics, a secure cloud-hosted software suite that allows consumer engagement tools that permit end water customers to view and manage their water usage activity.
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Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #1 (Strong Buy) stock.
The company experienced robust demand across its business segments, which was supported by improving supply-chain dynamics. The continued strength in E-Series ultrasonic meters, cellular AMI solution, ORION Cellular endpoint sales, and higher BEACON Software-as-a-Service revenues contributed to its positive performance.
Additionally, the company is actively working on reducing its backlog while benefiting from increasing demand for water quality and pressure monitoring systems. In the third quarter of 2023, the company witnessed a 31% rise in utility water sales, driven by strong customer demand.
By expanding its market share in water-related applications, the company can tap into new opportunities for growth and profitability. The company will leverage real-time water quality monitoring solutions to improve utility and business operations. These solutions, equipped with smart alarms and capable of monitoring pressure and temperature data, enable early detection of system anomalies. As a result, utility firms can reduce their maintenance and operating costs while ensuring efficient operations.
Synergies from the acquisition are likely to further drive the company’s top and bottom lines going forward. In January 2023, BMI acquired a UK-based intelligent water monitoring solutions company — Syrinix — for £15 million in an all-cash deal.
BMI witnessed earnings growth of 11.9% in the past five years, higher than the industry average of 9.4%. The stock has an impressive long-term earnings per share (EPS) growth expectation of 20.4%, higher than the industry average of 13.7%.
A Look at Estimates
Badger Meter’s EPS is expected to increase 35.8% and 9.1% on a year-over-year basis to $3.07 and $3.35 in 2023 and 2024, respectively.
The Zacks Consensus Estimate for 2023 and 2024 earnings has increased 7.3% and 8.1%, respectively, in the past 90 days, reflecting analysts’ optimism.
The company’s revenues for 2023 are projected to rise 23.1% to $696.4 million. For 2024, the revenues are anticipated to improve 7% to $745.1 million.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Pegasystems PEGA, Flex FLEX and Watts Water Technologies WTS. Pegasystems and Flex presently sport a Zacks Rank #1, whereas Watts Water Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Pegasystems’ 2023 EPS has improved 21.2% in the past 60 days to $1.77. PEGA delivered an average earnings surprise of 1,250.2% in the trailing four quarters. Shares of PEGA have soared 51% in the past year.
The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has increased 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%.
Flex’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 11%. Shares of the company have risen 19.8% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 3.9% in the past 60 days to $8.08. Watts Water’s long-term earnings growth rate is 7.8%.
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Badger Meter, Inc. (BMI) : Free Stock Analysis Report
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