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Why Is Badger Meter (BMI) Down 2.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Badger Meter (BMI - Free Report) . Shares have lost about 2.3% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Badger Meter's Q2 Earnings Miss Estimates
Badger Meter reported earnings per share (EPS) of $1.17 for the second quarter of 2025, which missed the Zacks Consensus Estimate by 3.3%.
However, the bottom line compared favorably with the year-ago quarter’s EPS of $1.12.
Quarterly net sales were $238.1 million, up 10% from $216.7 million in the year-ago quarter, driven by higher utility water sales and the contribution from the SmartCover acquisition. The Zacks Consensus Estimate was pegged at $234.3 million.
Management highlighted that Demand for its flexible, industry-leading cellular AMI solution and comprehensive BlueEdge portfolio of customizable water management offerings remained resilient, despite ongoing macroeconomic, trade and policy challenges.
The company has made meaningful progress in leveraging Badger Meter’s capabilities across SmartCover’s operations and is uncovering new go-to-market opportunities for SmartCover as part of its BlueEdge platform.
Segmental Performance
In the quarter under review, utility water sales rose 11% year over year, driven by continued customer adoption of digital smart water technologies, including higher sales of metering solutions, BEACON SaaS and water quality and remote monitoring products. Even excluding SmartCover, organic utility water sales were up 6%, building on the strong 26% growth achieved in the second quarter of 2024.
Flow instrumentation sales were relatively flat year over year, as slight growth in water-related markets was offset by reduced demand in non-water-related applications that the company is no longer prioritizing.
Other Details
In the second quarter, gross profit was $97.8 million, up from $85.4 million in the prior-year quarter. Gross margin was 41.1%, up 170 basis points (bps) year over year. This improvement was driven by continued enhancements in the structural sales mix and ongoing operational excellence initiatives. Additionally, recently implemented price increases helped partially offset certain tariff-related cost pressures during the quarter.
Operating earnings jumped 8% year over year to $44.9 million, while operating margin declined 40 bps to 18.8% from 19.2%.
SEA expenses rose 20.7% year over year to $52.9 million, primarily driven by the addition of SmartCover, which included $1.6 million in amortization of intangible assets. Without factoring in the SmartCover acquisition, SEA expenses increased 8%, mainly due to higher personnel costs to support business growth and approximately $1.0 million in deferred compensation expense linked to changes in the company’s stock price during the quarter. Overall, SEA expenses represented 22.2% of sales, up from 20.2% in the same quarter last year.
Cash Flow & Liquidity
In the second quarter of 2025, Badger Meter generated $44.6 million of net cash from operating activities compared with $36.4 million a year ago.
As of June 30, 2025, the company had $165.2 million of cash and cash equivalents and $138.7 million of total current liabilities compared with the respective figures of $131.4 million and $141 million as of March 31, 2025.
Outlook
Badger Meter is confident in achieving high single-digit revenue growth over the long term, supported by strong industry fundamentals, sustained customer demand, ongoing and upcoming RFP activity, project awards and the competitive strength of its comprehensive solution portfolio tailored to address critical water management needs.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.68% due to these changes.
VGM Scores
At this time, Badger Meter has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Badger Meter has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Badger Meter (BMI) Down 2.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Badger Meter (BMI - Free Report) . Shares have lost about 2.3% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Badger Meter's Q2 Earnings Miss Estimates
Badger Meter reported earnings per share (EPS) of $1.17 for the second quarter of 2025, which missed the Zacks Consensus Estimate by 3.3%.
However, the bottom line compared favorably with the year-ago quarter’s EPS of $1.12.
Quarterly net sales were $238.1 million, up 10% from $216.7 million in the year-ago quarter, driven by higher utility water sales and the contribution from the SmartCover acquisition. The Zacks Consensus Estimate was pegged at $234.3 million.
Management highlighted that Demand for its flexible, industry-leading cellular AMI solution and comprehensive BlueEdge portfolio of customizable water management offerings remained resilient, despite ongoing macroeconomic, trade and policy challenges.
The company has made meaningful progress in leveraging Badger Meter’s capabilities across SmartCover’s operations and is uncovering new go-to-market opportunities for SmartCover as part of its BlueEdge platform.
Segmental Performance
In the quarter under review, utility water sales rose 11% year over year, driven by continued customer adoption of digital smart water technologies, including higher sales of metering solutions, BEACON SaaS and water quality and remote monitoring products. Even excluding SmartCover, organic utility water sales were up 6%, building on the strong 26% growth achieved in the second quarter of 2024.
Flow instrumentation sales were relatively flat year over year, as slight growth in water-related markets was offset by reduced demand in non-water-related applications that the company is no longer prioritizing.
Other Details
In the second quarter, gross profit was $97.8 million, up from $85.4 million in the prior-year quarter. Gross margin was 41.1%, up 170 basis points (bps) year over year. This improvement was driven by continued enhancements in the structural sales mix and ongoing operational excellence initiatives. Additionally, recently implemented price increases helped partially offset certain tariff-related cost pressures during the quarter.
Operating earnings jumped 8% year over year to $44.9 million, while operating margin declined 40 bps to 18.8% from 19.2%.
SEA expenses rose 20.7% year over year to $52.9 million, primarily driven by the addition of SmartCover, which included $1.6 million in amortization of intangible assets. Without factoring in the SmartCover acquisition, SEA expenses increased 8%, mainly due to higher personnel costs to support business growth and approximately $1.0 million in deferred compensation expense linked to changes in the company’s stock price during the quarter. Overall, SEA expenses represented 22.2% of sales, up from 20.2% in the same quarter last year.
Cash Flow & Liquidity
In the second quarter of 2025, Badger Meter generated $44.6 million of net cash from operating activities compared with $36.4 million a year ago.
As of June 30, 2025, the company had $165.2 million of cash and cash equivalents and $138.7 million of total current liabilities compared with the respective figures of $131.4 million and $141 million as of March 31, 2025.
Outlook
Badger Meter is confident in achieving high single-digit revenue growth over the long term, supported by strong industry fundamentals, sustained customer demand, ongoing and upcoming RFP activity, project awards and the competitive strength of its comprehensive solution portfolio tailored to address critical water management needs.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.68% due to these changes.
VGM Scores
At this time, Badger Meter has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Badger Meter has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.