Badger Meter (BMI) Stock Forecast & Price Target

Badger Meter is well positioned by its oligopolistic leadership in U.S. smart water metering, where the top three players control roughly 80%-85% of the market and replacement demand accounts for more than 85% of sales. Its outlook is reinforced by a larger backlog of nine AMI projects totaling 2.6-3.6 million meter connections, the start of PRASA shipments, and a 2H26 deployment ramp that should drive the implied ~8% Y/Y organic growth in 2H26 after 1H26 organic revenue fell about 8% Y/Y. Longer term, the mix shift from mechanical to ultrasonic and from manual read to AMR/AMI, plus a 100% software attachment rate with BEACON and a net cash position of $96 million at 2Q26, support higher margins, financial flexibility, and continued capital returns.

Badger Meter is facing a weaker fundamental setup as its 1Q26 sales fell 9% year over year and 2Q26 organic revenue still declined about 7.5%, showing that the business is losing momentum after several years of outsized growth. The company’s core Utility Water segment, roughly 90% of sales, has been pressured by the sunsetting of large AMI projects, short-cycle order softness, and normalized industry backlogs, while rising electronic component costs and tighter supply are adding margin risk. Although gross margin held at 40.8% in 2Q26, operating profit fell 12% and free cash flow conversion slipped to 74%, supporting a cautious view on earnings durability and the premium valuation.