Badger Meter (BMI) Stock Forecast & Price Target

Badger Meter is viewed favorably because its core water-management franchise combines essential utility demand with a growing mix of higher-margin smart metering, cellular AMI, recurring software, and water-quality monitoring products that should support both revenue durability and margin expansion over time. Despite near-term lumpiness from 1H26 project timing and short-cycle softness, management reiterated flat-ish organic revenue for 2026 and expects a meaningful acceleration in 2H26 as nine awarded AMI projects totaling 2.6-3.6 million meter connections begin ramping, while gross margins are still expected within the 39%-42% normalized range and SaaS revenues are about 8% of sales with a 100% attachment rate to AMI radios. The outlook is further underpinned by disciplined capital allocation, including roughly $80 million of buybacks over the past three quarters, about $90 million remaining under authorization, and a renewed undrawn $150 million credit facility, all of which signal confidence in a business that has historically delivered mid-teens organic growth from 2021-2024 and should still grow at a healthy high-single-digit pace as the market normalizes in 2026.

Badger Meter is facing a negative fundamental setup because its 2026 organic revenue outlook has been reduced to flat growth after a 1Q26 miss and a 1H26 revenue air pocket tied to the conclusion of four large AMI deployments that had supported results from 2023 through 2025, leaving earnings and operating leverage vulnerable until the expected 2H26 ramp fully materializes. The company’s 2Q26 results showed the strain of that transition, with organic revenue down about 7.5% Y/Y, Utility Water down about 9.1% organically, EPS down 13% Y/Y to $1.02, operating profit down 12% Y/Y, and free cash flow conversion at 74%, while the bulk of the business remains exposed to a weak core mix and timing-dependent project revenue. Although margins remain respectable at 40.8% and software and acquisitions provide some support, rising electronic component costs and tightening availability from AI-driven semiconductor demand add a near-term cost headwind, and the guidance implies that any recovery is heavily back-half weighted and execution dependent.