Why Badger Meter Stock Is Plummeting 18% Lower This Week
2026-07-24 17:23
•Josh Kohn-Lindquist •The Motley Fool
••• • Axe Capital view
Badger Meter Slides, But Is It a Buying Opportunity?
Badger Meter's shares dropped sharply on softer sales and cautious guidance, yet its long-term utility story remains intact.
Badger Meter’s 18% drop this week is a textbook case of overreaction to a guidance reset. While its sales fell 7% and earnings per share dropped 13% in Q2, these numbers were still better than the low analyst expectations. The market soured on flat sales guidance for 2026 despite nine big utility projects lined up for the second half. From a valuation standpoint, the stock has moved from a lofty 42 times free cash flow to a more reasonable 24 times—a significant discount. This suggests the market is pricing in prolonged weakness that may not materialize. For South African investors, the main takeaway is that infrastructure plays—even abroad—can offer clues about long-term trends in water management, which is becoming critical here as well. Still, if the utility projects get delayed or if global growth slows sharply, this thesis could falter. this is just my opinion and not financial advice
I’d watch closely but lean toward buying on dips, given the valuation reset and long runway for growth. Avoid jumping in too early until the H2 project deliveries start proving their worth.
- BMI
- USD/ZAR
- Delays or cancellations of major utility infrastructure projects
- Slowing global growth impacting capital spending
6/10
Badger Meter's stock fell 18% this week after reporting mixed Q2 2026 earnings with 7% sales decline and 13% EPS drop, despite beating low expectations. The market was disappointed by flat 2026 sales guidance despite nine major utility projects scheduled for H2 2026 deployment. The analyst views the decline as a buying opportunity, citing the stock's shift from premium 42x FCF valuation to reasonable 24x FCF, and the company's strong long-term thesis in water infrastructure modernization.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Josh Kohn-Lindquist
Categories: Equities, Earnings, Capital Returns
Tickers: BMI
Sentiment: Positive - Despite the 18% weekly stock decline and negative earnings results, the analyst presents a bullish case viewing the selloff as a buying opportunity. The company's valuation has become more reasonable (24x FCF vs. historical 42x), it has a strong long-term investment thesis in water infrastructure modernization, maintains 21 consecutive years of dividend growth, and has nine major projects scheduled for H2 2026 that should drive future growth. The current weakness is attributed to temporary timing issues rather than fundamental deterioration.
Keywords: Badger Meter, Q2 2026 earnings, stock decline, smart water metering, sales guidance, valuation, utility projects, infrastructure
Insights:
- BMI: Positive: Despite the 18% weekly stock decline and negative earnings results, the analyst presents a bullish case viewing the selloff as a buying opportunity. The company's valuation has become more reasonable (24x FCF vs. historical 42x), it has a strong long-term investment thesis in water infrastructure modernization, maintains 21 consecutive years of dividend growth, and has nine major projects scheduled for H2 2026 that should drive future growth. The current weakness is attributed to temporary timing issues rather than fundamental deterioration.