Badger Meter Earnings Preview

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Investors braced for a bumpy ride ahead of Badger Meter's (NYS: BMI) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Tuesday. Badger Meter is a manufacturer and marketer of products incorporating liquid flow measurement and control technologies.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Badger Meter with four of seven analysts rating it hold. Analysts don't like Badger Meter as much as competitor Elster Group overall. Eleven out of 12 analysts rate Elster Group a buy compared to three of seven for Badger Meter. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $61 million in revenue this quarter. That would represent a decline of 5.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.28 per share. Estimates range from $0.23 to $0.35.

What our community says:
CAPS All-Stars are solidly backing the stock, with 94.7% giving it an outperform rating. Most of the community backs the All-Stars, with 92.4% granting it a rating of outperform. Fools are keen on Badger Meter, though the message boards have been quiet lately with only 69 posts in the past 30 days. Despite the majority sentiment in favor of Badger Meter, the stock has a middling CAPS rating of three out of five stars.

Management:
Badger Meter's income has fallen year-over-year by an average of 10.5% over the past five quarters. The company's gross margin shrank by 4.2 percentage points in the last quarter. Revenue fell 7.9% while cost of sales fell 1.7% to $46.9 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Badger Meter's net margins, which reflect what percentage of revenue becomes profit, have dropped year-over-year for the last three quarters. See how Badger Meter has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

32.7%

36.2%

35.6%

38.0%

Operating Margin

11.5%

16.3%

9.1%

14.9%

Net Margin

9.9%

10.4%

5.7%

9.7%

One final thing: If you want to keep tabs on Badger Meter movements, and for more analysis on the company, make sure you add it to your watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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