Badger Meter (BMI) Stock Gains 53% YTD: Will the Uptrend Last?
Badger Meter, Inc BMI is witnessing strong momentum, with shares gaining 53% year to date compared with the sub-industry’s growth of 23.3%
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 to 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 increase in share price is driven by the company’s robust financial performance. The company came up with an impressive performance in second-quarter 2023.
The company reported earnings per share (EPS) of 76 cents for second-quarter 2023, beating the Zacks Consensus Estimate by 13.4%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 57 cents. Quarterly net sales increased to $175.9 million from $137.8 million in the year-ago quarter. The 28% rise was primarily driven by robust demand for smart water solutions and improving operating environment. Also, the top line beat the consensus mark by 10.8%.
The company’s performance benefited from robust demand across business segments and the increased adoption of its differentiated smart water solution. Continued strength in E-Series, ultrasonic meters, cellular AMI solution, ORION Cellular endpoint sales and higher BEACON Software-as-a-Service revenues acted as major tailwinds.
A strong cash position with no long-term debt and ongoing price realization bode well. Synergies from the acquisition are likely to drive the company’s top and bottom lines in the future. In January 2023, BMI acquired a UK-based intelligent water monitoring solutions company — Syrinix — for £15 million in an all-cash deal.
Going ahead, the company is likely to benefit from increasing customer backlogs and improving operating environment. Also, effective spending controls and higher sales are likely to help in improving selling, engineering and administration expenses leverage.
Badger Meter’s EPS is expected to increase 26.6% and 8.4% on a year-over-year basis to $2.86 and $3.10 in 2023 and 2024, respectively.
The Zacks Consensus Estimate for 2023 and 2024 revenues has increased 6.3% and 6.1%, respectively, in the past 90 days, reflecting analysts’ optimism.
The company’s revenues for 2023 are projected to rise 17.3% to $663.5 million. For 2024, the revenues are anticipated to improve 5.8% to $701.7 million.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Watts Water Technologies WTS, Aspen Technology AZPN and Woodward WWD. Aspen Technology and Woodward sport a Zacks Rank #1, whereas Watts Water 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 Watts Water’s 2023 EPS has increased 5.8% in the past 60 days to $7.61. The company’s long-term earnings growth rate is 8%.
Watts Water’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 12.5%. Shares of WTS have rallied 28.3% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have surged 1% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 12.6% in the past 60 days to $4.03.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 27.2% in the past year.
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Badger Meter, Inc. (BMI) : Free Stock Analysis Report
Watts Water Technologies, Inc. (WTS) : Free Stock Analysis Report
Woodward, Inc. (WWD) : Free Stock Analysis Report
Aspen Technology, Inc. (AZPN) : Free Stock Analysis Report
