Financial Data and Key Metrics Changes - The company reported a 13% quarterly sales growth, building on a challenging 24% increase in the prior year comparable quarter [6] - Consolidated EPS was $1.04 in Q4 2024, a 24% improvement from $0.84 in the prior year comparable quarter [10] - Operating margins expanded by 150 basis points to 19.1% in the quarter, with gross profit margins improving to 40.3% from 39.2% in the prior year [7][10] - Free cash flow reached a record $47.4 million, up 32% year over year [11] Business Line Data and Key Metrics Changes - Total utility water product line sales increased by 14% year over year, driven by strong demand for the Blue Edge suite of utility smart water solutions [6] - Sales for the flow instrumentation product line were up slightly by 1% in the quarter, as growth in core water-related applications offset declines in other areas [7] Market Data and Key Metrics Changes - The company achieved 18% sales growth in 2024, surpassing $800 million in revenue, with a five-year top-line CAGR of 14% [12] - Software revenue exceeded $56 million, representing 6.7% of sales and a 28% compound annual growth rate over the past five years [12] Company Strategy and Development Direction - The acquisition of Smart Cover was announced, aimed at enhancing the company's offerings in sewer and lift station monitoring [4][14] - The company plans to leverage existing cash for the acquisition, which was priced at $185 million, equating to about five times Smart Cover's 2024 sales of approximately $35 million [15] - The strategic focus remains on addressing macro water challenges and enhancing the Blue Edge suite of solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing positive tone of the business, with expectations for high single-digit growth in 2025 [27] - The company anticipates continued improvement in margins and working capital efficiency, despite potential macroeconomic uncertainties [18][19] Other Important Information - The company reclassified the current portion of deferred revenue from payables to other current liabilities, which does not affect cash from operations or free cash flow [70] - The next earnings call is tentatively scheduled for April 17, 2025, marking the last call for the current VP of Investor Relations [71] Q&A Session Summary Question: Can you clarify your Mexico manufacturing exposure and contingency plans for potential tariffs? - Management acknowledged the uncertainty surrounding tariffs but emphasized their limited sourcing from China and strong operational capabilities in North America [22][25] Question: What are the demand drivers for Smart Cover? - Demand is driven by regulatory compliance, labor availability, and the need for real-time monitoring due to extreme weather events [31][32] Question: How much of Smart Cover's revenue is recurring? - Approximately one-third of Smart Cover's $35 million in trailing revenue is classified as recurring, with an additional 20% from aftermarket product replacement services [35] Question: What enabled the improvement in working capital performance? - Continuous improvement efforts and a focus on inventory management contributed to the reduction in inventory levels [36][38] Question: What is the outlook for revenue cadence through 2024? - Management noted that revenue can be uneven from quarter to quarter, with expectations for high single-digit growth over the strategic planning horizon [44][45] Question: Why does Smart Cover have a significant market share in monitoring solutions? - Smart Cover has established a strong presence in the market, leveraging its expertise and existing relationships with utility customers [49][50] Question: Will the acquisition of Smart Cover be accretive or dilutive to earnings in the short term? - The acquisition is expected to be EPS dilutive in 2025 but accretive in the following year [67]

Core Viewpoint - Badger Meter (BMI) reported quarterly earnings of $1.04 per share, exceeding the Zacks Consensus Estimate of $1.01 per share, and showing an increase from $0.84 per share a year ago [1][2]. Financial Performance - The earnings surprise for the quarter was 2.97%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2]. - Badger Meter's revenues for the quarter ended December 2024 were $205.18 million, surpassing the Zacks Consensus Estimate by 2.60%, and up from $182.44 million year-over-year [3]. Market Performance - Badger Meter shares have declined approximately 1.7% since the beginning of the year, while the S&P 500 has gained 3.2% [4]. - The current consensus EPS estimate for the upcoming quarter is $1.10 on revenues of $211.14 million, and for the current fiscal year, it is $4.76 on revenues of $887.82 million [8]. Industry Outlook - The Instruments - Control industry, to which Badger Meter belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [9]. - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Badger Meter's stock performance [6].

Financial Results Announcement - Badger Meter, Inc. announced its financial results for Q4 2024 on January 31, 2025[4] - The press release detailing the financial results is available as Exhibit 99.1[5] Company Information - The company is listed on the New York Stock Exchange under the symbol BMI[2] - The report was signed by Robert A. Wrocklage, Senior Vice President – Chief Financial Officer[10]

Core Viewpoint - Badger Meter, Inc. (BMI) is expected to report its fourth-quarter 2024 earnings on January 31, with revenue and earnings estimates indicating growth compared to the previous year [1][2]. Financial Performance Expectations - The Zacks Consensus Estimate for revenues is $198.9 million, reflecting a 9% increase year-over-year [2]. - The consensus estimate for earnings is $1.01 per share, indicating a year-over-year increase of 20.2% [2]. - Analysts have raised their earnings estimates by 1 cent in the past 60 days [2]. - BMI has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 10.4% [3]. Factors Influencing Earnings - Continued demand for BMI's smart water solutions, including mechanical and E-Series Ultrasonic meters, ORION Cellular endpoints, and BEACON Software-as-a-Service revenues, is expected to drive revenue growth [4]. - Secular trends in the water industry are increasing demand for digital water solutions, supported by a strong opportunity funnel and order book rates [5]. - The introduction of the BlueEdge platform in May 2024 is anticipated to contribute to revenue growth, with utility water sales rising 14% in the last quarter due to its adoption [6]. Market Expansion and Challenges - BMI is enhancing its presence in selected international markets with growth potential, likely increasing its market share in water-related applications [8]. - Management expressed caution regarding fewer operating days in Q4 due to the holiday season and potential delays in utility projects in the Southeastern U.S. due to hurricane recovery efforts [8][10]. - The company expects high single-digit sales growth rates moving forward, facing challenges from increased expenses, global macroeconomic uncertainty, forex volatility, and intensified competition [10].

Industry Overview - The Zacks Instruments – Control industry comprises manufacturers of precision and specialty motion-control components and systems used in a wide range of industries, including flow measurement, control, and communication solutions for air, water, and other gases and liquids [3] - The industry faces challenges such as unpredictable raw material prices, high capital expenditures, market volatility, supply-chain disruptions, and high customer inventory levels [1] - Despite these challenges, the industry is expected to benefit from a focus on energy-efficient production processes and integrated software systems [1] Key Drivers and Challenges - **Margin Erosion**: The industry faces intense price-sensitive competition, particularly from low-cost suppliers in China, which is expected to erode margins [4] - **Digitized Technologies**: Growth is driven by the adoption of digitized technologies, such as the Industrial Internet of Things, process automation, and safety automation systems [5] - **Raw Material Volatility**: Inflationary pressures, rising transportation costs, and geopolitical tensions have led to increased raw material prices, affecting production schedules and profitability [6] - **Industrial Automation**: Increased adoption of automation across industries, particularly in North America, is expected to drive growth, supported by infrastructural investments and favorable government policies [7] Industry Performance and Valuation - The Zacks Instruments – Control industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector, with an 8% growth compared to 25.3% and 28.4%, respectively [10] - The industry's trailing 12-month EV/EBITDA ratio is 10.79X, lower than the S&P 500's 19.02X and the sector's 19.28X [12] Key Companies - **Watts Water Technologies (WTS)**: Focuses on water safety and flow control products, benefiting from cost-reduction actions and a strong balance sheet. The company has a long-term earnings growth expectation of 6.8% and delivered an average earnings surprise of 7.1% in the trailing four quarters [14] - **Badger Meter (BMI)**: Provides flow measurement and control solutions, with a focus on digital solutions and real-time data analysis. The company has a long-term earnings growth expectation of 19% and delivered an average earnings surprise of 10.4% in the trailing four quarters [16][17] - **Thermon (THR)**: Offers industrial process heating solutions and has expanded its product lines through acquisitions. The company delivered an average earnings surprise of 14.9% in the trailing four quarters [19] Future Outlook - The industry is expected to benefit from the growing emphasis on digitized technologies, industrial automation, and energy efficiency, despite ongoing challenges such as raw material price volatility and competitive pressures [5][7]

Company Performance - Badger Meter (BMI) closed at $219.02, with a +0.25% change, underperforming the S&P 500's gain of 0.53% and the Dow's gain of 0.93% [1] - Over the past month, shares of Badger Meter have depreciated by 0.69%, while the Computer and Technology sector gained 3.02% and the S&P 500 gained 2.69% [1] Upcoming Earnings - Badger Meter's earnings report is scheduled for January 31, 2025, with projected earnings per share (EPS) of $1, reflecting a 19.05% increase year-over-year [2] - The Zacks Consensus Estimate for revenue is $198.92 million, indicating a 9.04% increase from the previous year [2] Analyst Projections - Recent shifts in analyst projections for Badger Meter should be monitored, as positive revisions indicate optimism regarding the company's business and profitability [3] Zacks Rank and Valuation - Badger Meter currently holds a Zacks Rank of 2 (Buy), with a stagnant consensus EPS projection over the past 30 days [5] - The company has a Forward P/E ratio of 46.07, which is a premium compared to the industry average of 23.46 [6] - Badger Meter's PEG ratio is 2.42, aligning with the industry average [6] Industry Context - The Instruments - Control industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 172, placing it in the bottom 32% of over 250 industries [7] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Badger Meter (BMI) closed at $215.17, with a +0.57% change from the previous day, underperforming the S&P 500's daily gain of 1% [1] - The stock has decreased by 2.06% over the past month, which is better than the Computer and Technology sector's loss of 4.13% and the S&P 500's loss of 2.14% [1] Upcoming Financial Results - Badger Meter is set to announce its earnings on January 31, 2025, with an expected EPS of $1, reflecting a 19.05% increase year-over-year [2] - The consensus estimate for revenue is $198.92 million, indicating a 9.04% increase compared to the same quarter of the previous year [2] Analyst Estimates and Stock Performance - Recent changes to analyst estimates for Badger Meter are important as they reflect short-term business dynamics, with positive changes indicating analyst optimism [3] - The Zacks Rank system, which incorporates these estimate changes, has shown a strong track record, with stocks rated 1 producing an average annual return of +25% since 1988 [4][5] Valuation Metrics - Badger Meter is currently trading at a Forward P/E ratio of 45.12, which is a premium compared to the industry's average Forward P/E of 23.02 [6] - The company has a PEG ratio of 2.37, aligning with the average PEG ratio of the Instruments - Control industry [6] Industry Context - The Instruments - Control industry is part of the Computer and Technology sector and currently holds a Zacks Industry Rank of 173, placing it in the bottom 32% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Badger Meter (BMI) closed at $209.78, reflecting a +1.49% change from the previous day, outperforming the S&P 500 which gained 0.12% [1] - Over the past month, shares of Badger Meter have decreased by 10.27%, underperforming the Computer and Technology sector's loss of 3.73% and the S&P 500's loss of 3.45% [2] Earnings Expectations - Badger Meter is expected to release its earnings on January 31, 2025, with an anticipated EPS of $1, representing a 19.05% increase year-over-year [3] - The consensus estimate for revenue is $198.92 million, indicating a 9.04% increase compared to the same quarter of the previous year [3] Analyst Projections - Investors should monitor recent shifts in analyst projections for Badger Meter, as positive estimate revisions can indicate optimism about the company's business outlook [4] - Changes in estimates are correlated with near-term stock prices, which is utilized in the Zacks Rank system to provide a rating [5] Zacks Rank and Valuation - Badger Meter currently holds a Zacks Rank of 2 (Buy), with the Zacks Rank system showing an average annual return of +25% for 1 ranked stocks since 1988 [6] - The company has a Forward P/E ratio of 43.59, which is a premium compared to the industry average Forward P/E of 22.13 [7] - Badger Meter's PEG ratio is 2.29, aligning with the industry average PEG ratio of 2.29 [7] Industry Context - The Instruments - Control industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 177, placing it in the bottom 30% of over 250 industries [8] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1, indicating the relative weakness of the current industry ranking [8]

Following my previous publication on Badger Meter (NYSE: BMI ) the stock is another +4% and now some serious decisions must be made.Equity strategist + Co-PM Global Equities [Bernard Holdings]. Objective view on the directional bias of markets. Technical expertise bridges the complex relationships between value drivers, capital flows and price action. Partners are represented over the cross-section of financial markets, from speculators, hedgers, long-term traders and the public. Research covers investment ...

Badger Meter (BMI) closed the most recent trading day at $213.44, moving +0.03% from the previous trading session. The stock's performance was behind the S&P 500's daily gain of 0.55%. Elsewhere, the Dow lost 0.06%, while the tech-heavy Nasdaq added 1.24%.The investment community will be closely monitoring the performance of Badger Meter in its forthcoming earnings report. The company is predicted to post an EPS of $1, indicating a 19.05% growth compared to the equivalent quarter last year. In the meantime, ...