Badger Meter, Inc. BMI witnessed strong momentum in the past year. Shares of the company have gained 43.7% in the same time frame compared with the sub-industry’s growth of 36.7%.
The company is a leading provider of water solutions, which include flow measurement, quality and other system parameters. The company’s products measure water, oil, chemicals, and other fluids and are known for accuracy, long-lasting durability, and provide valuable and timely measurement data.
BMI witnessed earnings growth of 16.6% in the past five years, higher than the industry’s average of 10.2%. The stock has an impressive long-term earnings per share (EPS) growth expectation of 15.6%, higher than the industry’s average of 12.7%.
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BMI presently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of B. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 (Buy) and a VGM Score of A or B offer solid investment opportunities.
Reasons for the Upside
Let’s delve deeper to unearth the factors working in favor of this stock.
Badger Meter’s performance is being driven by increased adoption of its differentiated smart water solutions. Continued strength in E-Series ultrasonic meters, cellular AMI solution, ORION Cellular endpoint sales and higher BEACON Software-as-a-Service revenues, along with rising demand for water quality and pressure monitoring systems, bode well.
Demand for digital smart water solutions has been increasing due to changing secular challenges in the water industry. In the first quarter, utility water sales rose 29% due to strong demand momentum.
Badger Meter’s EPS is expected to increase 23.9% and 10.1% from the year-ago levels to $3.89 and $4.28 in 2024 and 2025, respectively. The Zacks Consensus Estimate for 2024 and 2025 earnings has increased 9.9% and 8.9%, respectively, in the past 60 days, reflecting analysts’ optimism.
The company’s revenues for 2024 and 2025 are projected to rise 13.6% and 3.4% to $799.1 million and $826.1 million, respectively.
Strategic Acquisitions Drive Growth
The company broadens the scope of its products and services across the smart water solutions and water measurement market through focused acquisitions. In January, the company announced that it acquired select remote water monitoring hardware and software solutions from Trimble. The acquired solutions also include the Telog brand of remote telemetry units or RTUs and Trimble Unity Remote Monitoring software.
The acquisition will offer customers to monitor hardware and software for distributed data collection for applications in water, stormwater wastewater and environmental water monitoring in real time.
Prior to that, the company acquired a U.K.-based intelligent water monitoring solutions company — Syrinix — for £15 million in an all-cash deal. The integration of Syrinix’s solutions will help Badger Meter provide its clients with an expanded portfolio that will aid in preserving precious resources like water and improve asset life.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology space are Woodward WWD, Arista Networks ANET and Super Micro Computer SMCI. Woodward and Super Micro Computer sport a Zacks Rank #1, whereas Arista Networks carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has moved up 9.3% in the past 60 days to $5.76. WWD’s long-term earnings growth rate is 16.3%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 26.1%. WWD shares have risen 62.3% in the past year.
The Zacks Consensus Estimate for ANET’s 2024 EPS has increased 0.9% in the past 60 days to $7.53. ANET’s long-term earnings growth rate is 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 13.3%. Shares of ANET have gained 62.2% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2024 EPS has improved 8.3% in the past 60 days to $23.51. SMCI’s long-term earnings growth rate is 52.3%.
SMCI’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.9%. Shares of SMCI have risen 479.3% in the past year.
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