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Here's Why Investors Need to Bet on Badger Meter (BMI) Stock

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Badger Meter (BMI - Free Report) is a stock that investors may consider adding to their portfolio to make some gains from its upside potential amid ongoing volatility. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apart from a favorable rank, BMI has a Growth Score of A. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 and a VGM Score of A or B offer solid investment opportunities.

The Zacks Consensus Estimate for earnings per share for 2023 and 2024 are pegged at $2.57 and $2.74, up 13.7% and 6.8%, year over year, respectively. The Zacks Consensus Estimate for revenues for 2023 and 2024 are pegged at $604.8 billion and $631.6 billion, representing year-over-year growth of 6.9% and 4.4%, respectively.

BMI has delivered an average earnings surprise of 1.3% over the trailing four quarters. The stock has gained 30.9% in the past year compared with the sub-industry’s growth of 6.4%.

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A Look at Fundamental Drivers

Headquartered in Milwaukee, WI, Badger Meter provides flow measurement, control and communications solutions, water and gas utilities to municipalities and industrial customers worldwide.

Badger Meter’s performance is gaining from robust customer demand and strong order trends across majority end-market applications globally. 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.

In the last reported quarter, net sales increased to $147.3 million from $135.7 million from the year-ago quarter. The 8.5% (up 10% excluding the unfavorable impact of the stronger U.S. dollar) rise was primarily driven by robust demand for smart water solutions. Also, the top line beat the Zacks Consensus Estimate of $144.6 million.

A strong cash position with no long-term debt and ongoing price realization bode well. The company is likely to benefit from increasing customer backlogs and modestly easing supply-chain woes.

The company is likely to benefit by expanding its footprint in the Middle East and U.K., which are heavily investing in smart water applications. Also, effective spending controls are likely to help the company to improve selling, engineering and administration expenses leverage.

However, the company’s performance is likely to be affected by the deteriorating global macro environment, inflation and unfavorable foreign-currency movement.

Other Stocks to Consider

Some other top-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Perion Network (PERI - Free Report) and Pegasystems (PEGA - Free Report) , each presently sporting a Zacks Rank #1.

The Zacks Consensus Estimate for Arista Networks 2023 earnings is pegged at $5.76 per share, rising 11% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 22.9% in the past year.

The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.

Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 76.3% in the past year.

The Zacks Consensus Estimate for Pegasystem’s 2023 earnings is pegged at $1.31 per share, rising 111% in the past 60 days.

Pegasystem’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 40% in the past year.

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