BMI Should I Buy
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Badger Meter Inc (BMI) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown positive financial performance and insider confidence, the technical indicators, analyst sentiment, and lack of strong trading signals suggest holding off for now. The stock may be better evaluated after the anticipated growth re-acceleration in the second half of 2026.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is neutral at 63.464, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its resistance level (R1: 159.535), suggesting limited short-term upside.
Insider buying of 8,320 shares worth $1.26 million signals strong confidence in the company.
Positive financial performance in Q4 2025 with revenue, net income, EPS, and gross margin all showing YoY growth.
The company won a significant AMI deployment contract in Puerto Rico, covering 1.6 million service connections.
Analysts have recently downgraded the stock and lowered price targets, citing slower near-term growth and margin headwinds.
The stock's premium valuation and decelerating growth in the AMI adoption cycle create concerns.
Bearish moving averages and limited short-term upside based on technical levels.
In Q4 2025, Badger Meter reported a 7.57% YoY increase in revenue to $220.7 million, a 9.30% YoY increase in net income to $33.58 million, and a 9.62% YoY increase in EPS to $1.14. Gross margin improved to 42.13%, up 4.46% YoY.
Analyst sentiment is mixed to negative. Recent downgrades include Argus lowering the rating to Hold and Barclays assigning an Underweight rating. Price targets have been reduced across the board, with concerns about slower near-term growth and margin headwinds. However, some analysts remain optimistic about a growth rebound in the second half of 2026.
