Badger Meter (BMI) Stock Forecast & Price Target

Badger Meter Inc has demonstrated significant growth in its sales over the past years, with an estimated market share increase attributed to a compound annual growth rate (CAGR) of 7% in its rest-of-the-world (ROW) sales over the last five years and 6% over the last decade. The company achieved a record operating profit margin of 19.1%, reflecting a 230 basis points year-over-year increase due to improvements in gross profit margins and effective selling, general, and administrative (SG&A) cost management. Additionally, the company's utility water sales rose by 14% year-over-year, driven by strong adoption of its BlueEdge technology solutions, further enhancing its growth prospects in the expanding market for flow measurement and water quality monitoring.

Badger Meter Inc is facing a challenging outlook, as analysts project a significant deceleration in sales growth from a mid-20% pace last year to high-single-digit growth anticipated in the latter half of 2024. The company's historical performance shows resilience, with only two instances of earnings decline in the past decade; however, the recent trend indicates a concerning shift as sales growth has markedly slowed since 2022. Additionally, the gross margin has faced downward pressure since 2013, primarily due to increased sales to lower-margin municipal customers, which may impact future profitability.