What Happened?

Shares of water control and measure company Badger Meter (NYSE: BMI) fell 14.2% in the morning session after the company reported second-quarter earnings that fell short of Wall Street expectations. 

Badger Meter announced second-quarter earnings per share (EPS) of $1.17, which missed the average analyst estimate of $1.21 per share. While total sales for the quarter rose 10% year-over-year to $238.1 million, beating forecasts, the earnings miss appeared to weigh on investor sentiment., The company noted that while utility water sales increased by 11%, driven by demand for its smart water solutions and the recent SmartCover acquisition, sales of its flow instrumentation products were flat compared to the prior year. Additionally, operating profit margins saw a slight decrease from 19.2% to 18.8% year-over-year, and the company's tax rate increased.

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What Is The Market Telling Us

Badger Meter’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Badger Meter and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 7% on the news that the company reported impressive first quarter 2025 results which exceeded analysts' revenue and EPS estimates. 

Sales rose 13% year-on-year, fueled primarily by a 16% gain in utility water sales. Margins also expanded meaningfully due to a more favorable product and customer mix. While the company did not issue formal guidance, management acknowledged that the second quarter would face tougher comparisons, yet reaffirmed confidence in long-term growth. Overall, we think this was a solid quarter with some key areas of upside.

Badger Meter is up 0.1% since the beginning of the year, but at $211.97 per share, it is still trading 16.6% below its 52-week high of $254.17 from June 2025. Investors who bought $1,000 worth of Badger Meter’s shares 5 years ago would now be looking at an investment worth $3,349.

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