It has been about a month since the last earnings report for Badger Meter (BMI Quick QuoteBMI - Free Report) . Shares have lost about 11.8% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Badger Meter due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Badger Meter Q1 Earnings Miss Estimates

Badger Meter reported earnings of 49 cents per share for first-quarter 2022, slightly missing the Zacks Consensus Estimate of 51 cents. Nonetheless, the bottom line compares favorably with the year-ago quarter’s earnings of 47 cents.

Net earnings in the reported quarter were $14.4 million compared with $13.8 million in the year-ago quarter. The year-over-year improvement can be primarily attributed to higher revenues.

Revenues

Quarterly net sales increased to $132.4 million from $117.8 million in the year-ago quarter. The 12% rise was primarily due to record order rates, driven by robust demand and accelerated adoption of innovative digital water technologies.

However, the top line lagged the consensus mark of $134 million.

Segmental Performance

During the reported quarter, utility water sales soared 15%, owing to record order momentum and backlog conversion. Also, strength in ultrasonic meters and ORION Cellular endpoint sales along with higher BEACON Software-as-a-Service (SaaS) revenues acted as major tailwinds. Intermittent supply chain disruptions partly offset this.

Flow instrumentation sales were flat year over year as a result of supply-chain woes that impacted manufacturing output despite continued strong order trends across the majority of end-market applications globally.

Other Details

During the March-end quarter, gross profit was $50.7 million, up 2.8% from $49.3 million in the year-earlier quarter. The gross margin was 38.3%, down from the 41.9% recorded in the prior-year quarter. This downside in the margin was primarily driven by inflationary pressure along with production volatility caused by erratic component delays. Operating earnings were $18.9 million or 14.2% of sales compared with respective tallies of $17.7 million and 15.1% in the year-earlier quarter.

Selling, engineering, and administration (SEA) expenses were $31.9 million or 24.1% of sales compared with $31.6 million or 26.8% in the prior-year quarter. Effective spending controls and higher sales mainly drove the year-over-year improvement in SEA expense leverage.

Cash Flow & Liquidity

During the first quarter of 2022, Badger Meter generated $9.3 million of net cash from operating activities compared with $30.6 million a year ago. As of Mar 31, 2022, the company had $89.2 million of cash and cash equivalents and $88.5 million of total current liabilities compared with the respective tallies of $87.2 million and $82.1 million a year ago.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

At this time, Badger Meter has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Badger Meter has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.