3 Reasons We Love Badger Meter (BMI)

October 09, 2025 at 00:02 AM EDT

BMI Cover Image

Since April 2025, Badger Meter has been in a holding pattern, posting a small loss of 2.5% while floating around $180. The stock also fell short of the S&P 500’s 22.7% gain during that period.

Does this present a buying opportunity for BMI? Or is its underperformance reflective of its story and business quality? Find out in our full research report, it’s free for active Edge members.

Why Is BMI a Good Business?

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE: BMI) provides water control and measure equipment to various industries.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Badger Meter’s sales grew at an incredible 16% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Badger Meter’s EPS grew at an astounding 23.5% compounded annual growth rate over the last five years, higher than its 16% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Badger Meter Trailing 12-Month EPS (Non-GAAP)

3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Badger Meter has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company’s free cash flow margin was among the best in the industrials sector, averaging 15.2% over the last five years.

Badger Meter Trailing 12-Month Free Cash Flow Margin

Final Judgment

These are just a few reasons why we think Badger Meter is an elite industrials company. With its shares trailing the market in recent months, the stock trades at 36.2× forward P/E (or $180 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.

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