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Reasons to Retain Badger Meter (BMI) Stock in Your Portfolio

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Badger Meter (BMI - Free Report) is benefiting from robust demand environment and higher adoption of innovative digital water technologies, particularly ORION Cellular endpoints and the BEACON digital platform.

The company also has an impressive Growth Score of A. This style score consolidates all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.

Badger Meter’s 2022 and 2023 earnings are expected to increase 4.3% and 12.9%, respectively, year over year. Revenues are anticipated to rise 8.3% and 6% in 2022 and 2023, respectively.

BMI has outpaced estimates in three of the trailing four quarters, delivering an earnings surprise of 10.7%, on average.

In the last reported quarter, Badger Meter posted earnings of 49 cents per share that compared favorably with the year-ago quarter’s earnings of 47 cents. Quarterly net sales increased 12% to $132.4 million.

For the second quarter, the Zacks Consensus Estimate for earnings is pegged at 53 cents, up 10.4% year over year. The consensus mark for revenues is pegged at $135.5 million, suggesting an increase of 10.3% year over year.

Amid the ongoing volatility, BMI stock has proved more resilient than the Zacks sub-industry it belongs to. The stock has lost 19.5% in the past year against a 23% decline of the sub-industry.

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The stock is down 28.3% from its 52-week high level of $112.36 on Dec 08, 2021, making it relatively affordable for investors.

Strong Fundamentals

Headquartered in Milwaukee, WI, Badger Meter provides flow measurement, control and communications solutions, serving water and gas utilities, municipalities and industrial customers worldwide. The company’s products measure water, oil, chemicals and other fluids and are known for accuracy, long-lasting durability and for providing valuable and timely measurement data.

Increasing record order rates, driven by robust demand and accelerated adoption of innovative digital water technologies, are major tailwinds for Badger Meter. The company’s ORION Cellular endpoints and BEACON digital platform is witnessing significant momentum. A healthy demand environment and recovering market trends post the pandemic also drive the company’s backlog.

With ORION Cellular endpoints and communication and software technologies, Badger Meter is focused on creating robust digital solutions to operationalize real-time data into actionable insights. Its BEACON software-as-a-service offering facilitates collecting and analyzing data within the distribution network to improve operational awareness. .

However, inflationary pressure along with production volatility caused by global supply chain disruptions is likely to affect quarterly margins for this Zacks Rank #3 (Hold) stock.

Stocks to Consider

A few other top-ranked stocks from the broader technology sector worth consideration are InterDigital (IDCC - Free Report) , Aspen Technology (AZPN - Free Report) and Broadcom (AVGO - Free Report) . All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $37.03 per share, up 3.8% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 2.2%. Shares of AVGO have lost 15.1% of their value in the past year.

The Zacks Consensus Estimate for InterDigital 2022 earnings is pegged at $2.90 per share, up 27.2% in the past 60 days. IDCC’s long-term earnings growth rate is pegged at 15%.

InterDigital’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 141.1%. Shares of IDCC have lost 15.1% of their value in the past year.

The Zacks Consensus Estimate for Aspen’s fiscal 2022 earnings is pegged at $5.50 per share, rising 1.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.4%.

Aspen’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 4.1%. Shares of AZPN have grown 30.7% in the past year.

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