Bear of the Day: Badger Meter (BMI)

Badger Meter Company Overview

Zacks Rank #5 (Strong Sell) stock Badger Meter (BMI) is a leader in the water technology sector. The Milwaukee, WI-based company specializes in smart meters that measure flow and quality of water, oil, chemicals, and other fluids. Badger Meter’s products are best-known for their accuracy, long-lasting durability, and valuable and timely measurement data. BMI’s business falls into three major categories:

1.      Utility Water: The utility water product line consists of mechanical or static water meters and related radio and software technologies used by water utilities to generate water and wastewater revenue. Roughly 70% of water meters installed in the United States have converted to some form of radio solution technology.

2.      Flow Instrumentation: This product line primarily serves water applications. The product line consists of meters, valves, and other sensing devices for measuring and controlling the volume of liquids and gases flowing through pipes or pipelines, such as water, air, and steam.

3.      Connectivity & IoT: BMI’s ORION product enables utilities to monitor data remotely, eliminating the need to send a technician out for every issue.

Badger Meter’s Costs are Rising

Because Badger Meter operates internationally, the company is experiencing negative impacts from global tariffs and trade conditions. Additionally, elevated copper and component prices are creating a potential gross margin headwind into 2026. Profit margins have shrunk from 17% to 15% over the past year, and this trend is likely to continue.

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Badger Meter Faces Mounting Competitive Pressures

While BMI remains the dominant player in its industry, the company faces mounting competitive pressure from rivals such as Honeywell (HON) and Itron (ITRI). Meanwhile, several Wall Street analysts tracked by Zacks Investment Research have lowered earnings estimates for 2026 and 2027 – a troubling trend.

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BMI Technicals are Deteriorating

Over the past year, BMI shares have underperformed dramatically, falling ~30%. Additionally, shares are below the key moving averages and are forming a bear flag pattern.

Image Source: TradingView

Bottom Line

Despite its established leadership in water technology and a robust suite of smart-metering solutions, Badger Meter faces a challenging road ahead through 2026. The combination of intensifying competition and the persistent pressure of rising component costs has created a difficult environment for margin growth.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

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