Bear of the Day: Badger Meter, Inc. (BMI)

Badger Meter, Inc. (BMI) stock tanked after its second quarter earnings release on July 22.Wall Street is worried about the water management solutions firm’s slowing growth outlook and the negative impact of tariffs and other near-term headwinds.What’s Going On With BMI Stock?Badger Meter’s flow measurement, water quality, and control products serve water utilities, municipalities, and commercial and industrial customers worldwide. The company’s high-tech smart water metering solutions empower its customers to optimize the delivery and use of water to maximize revenue and reduce waste.Badger Meter’s offerings aren’t flashy. But its essential water-focused tech is growing in popularity as the U.S. and countries around the world spend heavily on water preservation at every level.Badger Meter posted rather steady revenue growth over the last 25 years, including 18% average sales growth between 2021 and 2024. Despite this tough to compete against stretch for the water technology firm, BMI is projected to grow its sales by another 11% in 2025 and 8% next year.Image Source: Zacks Investment ResearchAlong with its strong sales growth came an earnings boom, including 35% expansion in 2024 and 38% in 2023. But its earnings revisions are trending in the wrong direction in 2025, with its outlook fading again following its downbeat Q2 release that saw its EPS expand by just 4%.BMI pointed to “certain tariff-related cost pressures” as part of the reasons for its disappointing guidance. Wall Street also wasn’t pleased to see that “total Selling, Engineering and Administration (SEA) expenses increased year-over-year by $9.1 million to $52.9 million, due primarily to the addition of SmartCover.” Its operating profit margins slipped from 19.2% in the year-ago period to 18.8% in Q2.Badger Meter’s FY26 earnings estimate is down over 5% since its Q2 release, with its Q3 outlook 8% lower. The downbeat EPS revisions trend earns the stock a Zacks Rank #5 (Strong Sell) right now.BMI stock is up 190% in the last five years to outpace its sector’s 110%, and it blew away the S&P 500 over the last 15 years. Some investors might be tempted to buy the dip here. Yet it could be wise to wait for Badger Meter to prove its earnings revisions are ready to start trending in the right direction.  Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity.Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Badger Meter, Inc. (BMI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks