Abstract
Badger Meter will report third-quarter results on October 22, 2026 before market open (Pre-MKt); this preview summarizes consensus forecasts for revenue, gross margin, net profitability and EPS, reviews last quarter’s performance trends, outlines business drivers and risks for the current quarter, and compiles prevailing analyst opinions.
Market Forecast
Consensus for the current quarter points to revenue of 240.42 million US dollars, up 3.68% year over year, with EBIT of 47.55 million and EPS of 1.226, implying year-over-year growth of 14.00% for EBIT and 7.75% for EPS. Year-over-year revenue growth is expected to moderate from last year’s levels; margin commentary from the previous print suggests stable-to-firm gross profitability and mid-teens operating leverage if mix remains favorable. There is no explicit consensus for GAAP net profit or net margin; based on the latest quarter’s structure, the market looks for resilient profitability supported by product mix and pricing.
Management’s main business focus remains metering systems and solutions, where recurring software and services support equipment placements; demand for AMI/AMR upgrades and water network intelligence is expected to underpin steady orders. The most promising segment continues to be advanced metering infrastructure and networked solutions, which is expected to lead growth with steady adoption; detailed revenue and year-over-year figures for this sub-segment are not separately disclosed in consensus.
Last Quarter Review
In the previous quarter, Badger Meter posted revenue of 222.32 million US dollars, a gross profit margin of 40.83%, GAAP net profit attributable to shareholders of 29.72 million US dollars, a net profit margin of 13.37%, and adjusted EPS of 1.02, with year-over-year changes of -6.63% for revenue, -12.82% for EPS, and -12.23% for EBIT. Quarter over quarter, net profit increased by 8.73%, reflecting resilient pricing and operating efficiency despite softer volumes.
Main business revenue was concentrated in performance-obligations recognized at a point in time at 197.57 million US dollars and over time at 24.75 million US dollars; segment-level year-over-year details were not disclosed. Demand remained most resilient in networked metering and software-enabled solutions that help utilities manage non-revenue water and labor constraints.
Current Quarter Outlook
Core Metering and Solutions
Order patterns from municipal and utility customers appear healthy heading into the seasonally active period, and the revenue estimate implies sequential improvement from the prior quarter. With a gross profit margin last quarter of 40.83%, the company is positioned to hold margins near the low-40% range if component costs and freight remain stable, while pricing taken over the past two years supports unit economics. A mix tilting toward packaged systems and endpoints should sustain EBIT growth of 14.00% year over year implied by current-quarter forecasts.
Execution risk centers on project phasing: larger AMI rollouts can shift between quarters based on customer readiness and installation cadence, affecting revenue recognition between “point in time” hardware and “over time” software/services. Supply chain conditions have largely normalized versus the recent past, which can reduce expedite-related costs but also remove some pricing tailwinds compared with peak scarcity. Inventory discipline at distributors and utilities is a watch item, as some customers may run leaner inventories into year-end budgets, which could temper upside.
Advanced Metering Infrastructure and Networked Solutions
Networked solutions, including smart endpoints, communication modules, and analytics, are the key structural growth engine as utilities prioritize leak detection, non-revenue water reduction, and remote reads to lower field labor. This mix typically carries higher gross margin than standalone mechanical meters, and broader software attachment can add recurring revenue stability. While consensus does not break out a separate revenue figure, the quarter’s directional setup suggests this business is the primary contributor to the forecast EPS increase of 7.75% year over year.
Project timing can still create quarter-to-quarter noise, especially when endpoint shipments precede software activation or when customers stage rollouts. Competitive dynamics in bids remain rational, but pricing discipline will be necessary to safeguard the implied EBIT of 47.55 million. Any incremental wins in mid-sized municipal AMI conversions could support upside to revenue beyond the 240.42 million US dollars baseline.
Key Stock Drivers This Quarter
Margin trajectory is the near-term swing factor. Maintaining gross margin near the recent 40.83% level would align with the EPS forecast of 1.226; any favorable mix toward software-enabled solutions could lift net margin above the last quarter’s 13.37%. Conversely, if installations skew toward lower-margin hardware or if project schedules slip into next quarter, EPS leverage would moderate.
Bookings commentary and backlog quality will shape investor expectations into the next fiscal period. The market will look for signals on AMI conversion pipelines, attach rates for analytics, and replacement cycles in drought- and leakage-prone regions. Capital allocation updates, including capacity investments or selective M&A to broaden analytics and pressure management capabilities, could influence valuation multiples if positioned as accretive to growth and margins.
Analyst Opinions
Bullish views dominate among recently published ratings within the review window. One Sell is outweighed by two Buy reiterations from well-followed institutions, resulting in a 67% bullish to 33% bearish ratio. Stifel Nicolaus, via analyst Nathan Jones, maintained a Buy rating with a 140.00 US dollars target, emphasizing ongoing adoption of networked metering solutions and the earnings power from higher software and endpoint penetration. RBC Capital, through analyst Jeff Reive, also maintained a Buy with a 169.00 US dollars target, highlighting solid visibility in AMI project pipelines and confidence in sustaining double-digit EBIT growth trends implied by the 47.55 million forecast. The minority bearish view from Barclays, maintaining Sell with a 110.00 US dollars target, points to valuation concerns and the risk of normalization in order timing; however, the prevailing market interpretation favors continued mix-driven margin support and resilient utility demand, which align with the consensus EPS of 1.226 and revenue of 240.42 million US dollars.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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