Breaking Down Badger Meter, Inc. (BMI) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and seeking a reliable company in the water technology sector? Have you considered how factors like sales growth, profit margins, and strategic acquisitions might impact a company's financial health? In 2024, Badger Meter showcased its strength with record total sales of $826.6 million, an 18% increase from the previous year, and a notable 35% increase in diluted earnings per share, reaching a record $4.23. Let's delve into the key financial insights that highlight Badger Meter's performance and what they could mean for investors like you.

Badger Meter, Inc. (BMI) Revenue Analysis

Understanding Badger Meter, Inc. (BMI)'s revenue streams involves examining its primary sources, growth rates, and the contributions of different business segments. A detailed analysis provides investors with key insights into the company’s financial health and future prospects. Here's a breakdown of BMI's revenue performance:

Breakdown of Primary Revenue Sources:

Badger Meter generates revenue primarily through:

• Products: Sales of water meters, flow measurement devices, and related technologies.
• Services: Software as a Service (SaaS) offerings like BEACON®, and remote network monitoring.
• Geography: Diverse U.S. utility customer base.

Year-over-Year Revenue Growth Rate:

Badger Meter has demonstrated robust revenue growth over the past few years.

• The company's revenue for the twelve months ending December 31, 2024, was $0.827B, marking a 17.48% increase year-over-year.
• Annual revenue for 2024 also stood at $0.827B, a 17.48% increase from $0.704B in 2023.
• In 2023, the annual revenue was $0.704B, which was a 24.4% increase from $0.566B in 2022.
• The 2022 annual revenue of $0.566B represented an 11.95% increase from 2021.

Contribution of Different Business Segments to Overall Revenue:

The growth is attributed to:

• Strong AMI and software-related sales.
• Increased water meter volumes, including E-Series® Ultrasonic meters.
• Cellular AMI offerings, including ORION® Cellular endpoints.
• Software sales of over $56 million in 2024, increasing approximately 30% year-over-year.

Analysis of Any Significant Changes in Revenue Streams:

Significant changes in revenue streams include:

• The acquisition of SmartCover® Systems, enhancing network monitoring in the BlueEdge™ suite.
• The introduction of BlueEdge™, a platform brand aimed at simplifying scalable solutions for efficient water management.
• Acquisition of the Telog/Unity remote network monitoring offering.

Badger Meter has shown consistent revenue growth, driven by strong performance in its utility water sales and software solutions. The company's strategic acquisitions and innovative product offerings continue to support its financial success. For more insights into Badger Meter's values, see: Mission Statement, Vision, & Core Values of Badger Meter, Inc. (BMI).

Badger Meter, Inc. (BMI) Profitability Metrics

Analyzing Badger Meter, Inc.'s (BMI) financial health involves a close examination of its profitability metrics. These metrics provide insights into the company's ability to generate earnings relative to its revenue, assets, and equity. Key profitability measures include gross profit margin, operating profit margin, and net profit margin.

For the full year 2024, Badger Meter reported:

• Record total sales of $826.6 million, an 18% increase compared to the prior year's $703.6 million.
• Operating profit margins improved by 230 basis points over the prior year, reaching 19.1%.
• Diluted EPS increased by 35% to a record $4.23, up from $3.14 in the prior year.

Here's a detailed breakdown:

• Gross Profit Margin: For the third quarter of 2024, the gross margin was 40.2%, a 110 basis point increase over the comparable prior year period. The full year saw gross margin dollars increase by 16% year-over-year, with gross margin as a percent of sales at 40.3%, a 110 basis point increase. This improvement reflects benefits from a positive structural sales mix, including strong AMI and software-related sales, as well as price/cost management and operating execution.
• Operating Profit Margin: The operating profit margin reached a record 19.5% in the third quarter of 2024, a 260 basis point improvement from the prior year's 16.9%. For the full year, Badger Meter achieved a record operating profit margin of 19.1%.
• Net Profit Margin: Badger Meter's net profit margin for the quarter ending December 31, 2024, was 15.13%. The average net profit margin for 2023 was 12.55%, a 5.73% increase from 2022.

A comparison of profitability ratios with industry averages would provide a more contextual understanding of Badger Meter's performance. However, without specific industry averages, the focus remains on the company's historical performance and internal benchmarks.

Analysis of operational efficiency reveals the following:

• Cost Management: Badger Meter has demonstrated effective cost management, contributing to gross margin improvements.
• Gross Margin Trends: The upward trend in gross margins reflects a favorable sales mix, including higher sales of AMI and software solutions.
• SEA Expenses: Selling, Engineering, and Administration (SEA) expenses in the third quarter of 2024 were $43.3 million, a $2.0 million increase from the prior year. However, SEA as a percent of sales improved by 140 basis points to 20.8% due to strong sales growth.

Here's a summary of Badger Meter's financial performance metrics in 2024:

These metrics reflect Badger Meter's strong financial performance in 2024, driven by increased sales, improved margins, and effective cost management. For more detailed insights, you can explore Breaking Down Badger Meter, Inc. (BMI) Financial Health: Key Insights for Investors.

Badger Meter, Inc. (BMI) Debt vs. Equity Structure

Understanding how a company like Badger Meter, Inc. (BMI) finances its operations is crucial for investors. This involves examining the balance between debt and equity, which reveals insights into the company's financial risk and growth strategy.

As of the fiscal year 2024, Badger Meter, Inc. (BMI) maintains a relatively conservative debt profile. Here’s a closer look:

• Overview of Debt Levels: Badger Meter's debt includes both long-term and short-term obligations. As detailed in their recent financial statements, the company's long-term debt stands at $65.4 million. This indicates the financial obligations due beyond one year, reflecting investments in long-term assets and strategic initiatives.
• Short-term debt, representing obligations due within a year, is reported at $3.2 million. This covers immediate liabilities such as accounts payable and the current portion of long-term debt.

The debt-to-equity ratio is a key metric for assessing financial leverage. Here's how Badger Meter stacks up:

• Debt-to-Equity Ratio: Badger Meter's debt-to-equity ratio is approximately 0.10. This ratio is calculated by dividing the total debt ($68.6 million) by the total equity ($664.5 million). A lower ratio suggests that the company relies more on equity than debt to finance its assets, indicating a more financially stable position.
• Industry Comparison: When compared to industry standards, Badger Meter's debt-to-equity ratio is favorable. The industry average varies, but many companies in similar sectors often have higher ratios, reflecting greater reliance on debt financing. Badger Meter's lower ratio suggests a more conservative approach to financial leverage.

Recent activities in debt and credit ratings provide additional context:

• Recent Debt Activities: There have been no recent debt issuances, credit ratings, or refinancing activities.

Balancing debt and equity is crucial for sustainable growth:

• Balance Between Debt and Equity: Badger Meter strategically balances debt and equity to fund its growth. With a low debt-to-equity ratio of 0.10, the company primarily uses equity to finance its operations. This approach reduces financial risk and provides flexibility for future investments. The company’s financial strategy ensures that it can pursue growth opportunities without overextending its balance sheet.

For further insights into the company's values and strategic direction, explore Mission Statement, Vision, & Core Values of Badger Meter, Inc. (BMI).

Badger Meter, Inc. (BMI) Liquidity and Solvency

When evaluating a company's financial health, liquidity and solvency are key factors to consider. Liquidity refers to the ability of a company to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations. Let's delve into how Badger Meter, Inc. (BMI) measures up in these areas.

Here's an analysis of Badger Meter, Inc.'s (BMI) liquidity, working capital, and cash flow trends:

• Current Ratio: For the quarter that ended in December 2024, Badger Meter's current ratio was 4.57.
• Quick Ratio: For the quarter that ended in December 2024, Badger Meter’s quick ratio was 3.36. This ratio, which excludes inventories from current assets, indicates good short-term financial strength.
• Cash Ratio: The cash ratio as of December 2024 was 2.50.

These ratios suggest that Badger Meter possesses a strong liquidity position, showcasing its capability to comfortably meet its short-term liabilities with its available liquid assets.

An overview of Badger Meter's working capital trends:

• Net Current Asset Value:$329.94 million.
• Change in Net Working Capital: Badger Meter operated at a median change in net working capital of $8.661 million from fiscal years ending December 2020 to 2024.
• Net Working Capital Change in 2024: A decrease primarily driven by:
  • $10.27 million decrease in Inventory
  • $0.82 million increase in Receivables
  • $26.15 million decrease in Creditors
  • $3.86 million increase in Other Current Assets
  • $11.18 million increase in Other Current Liabilities
  • $24.02 million increase in Others

These factors together provide a picture of how Badger Meter manages its short-term assets and liabilities to support its operations.

A snapshot of Badger Meter's cash flow statements:

• Record Cash Flow:$52.1 million in net cash provided by operations, a 37% increase over the prior year (Q4 2024).
• Record Cash Flow:$155 million in net cash provided by operations for the full year 2024.

The robust cash flow from operations underscores Badger Meter's ability to generate cash internally, which can be used for investments, debt reduction, and shareholder returns.

Solvency Ratios for Badger Meter:

• Solvency Ratio:0.59 as of December 2024.
• Debt-to-Assets Ratio:0.00 for December 2024.
• Debt-to-Equity Ratio:0.00 for December 2024.

These solvency ratios indicate that Badger Meter has a strong solvency position. The company's minimal debt levels further reinforce its financial stability.

Additional insights into Badger Meter's financial performance:

• Total Sales: Record total sales of $826.6 million, 18% higher than the previous year.
• Operating Profit Margins: Improved to 19.1%.
• Diluted EPS: Increased 35% to a record $4.23.

Here's a table summarizing key financial data for Badger Meter:

Overall, Badger Meter, Inc. (BMI) demonstrates a strong financial footing with solid liquidity and solvency positions. The company's increasing sales, improved profit margins, and robust cash flow generation highlight its operational efficiency and financial stability. These factors collectively make Badger Meter an attractive prospect for investors seeking financially sound companies. For more insights, explore: Mission Statement, Vision, & Core Values of Badger Meter, Inc. (BMI).

Badger Meter, Inc. (BMI) Valuation Analysis

Assessing whether Badger Meter, Inc. (BMI) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. This approach helps provide a comprehensive view of the company's current market position.

To determine if BMI is correctly valued, consider the following:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of BMI's earnings. A higher P/E ratio might suggest overvaluation if it's significantly above industry averages, while a lower ratio could indicate undervaluation.
• Price-to-Book (P/B) Ratio: The P/B ratio compares BMI's market capitalization to its book value of equity. A lower P/B ratio may suggest the stock is undervalued, as it implies the market is valuing the company at less than its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares BMI's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a clearer picture of valuation by accounting for debt and operational efficiency.

Analyzing the trend of stock prices provides context to valuation metrics:

• Stock Price Trends: Examining BMI's stock price movement over the past 12 months, or longer, can reveal investor sentiment and market dynamics affecting the stock's valuation. Consistent growth might reflect positive market perception, while volatility could indicate uncertainty.

For investors, dividends are an important component of total return, so analyzing dividend yield and payout ratios is crucial. As of February 8, 2024, Badger Meter announced a cash dividend of $0.29 per share for the first quarter of 2024. The annual dividend rate is $1.16 per share.

Here's a look at recent dividend declarations:

• February 8, 2024: Declared a dividend of $0.29 per share.
• November 3, 2023: Declared a dividend of $0.29 per share.
• August 4, 2023: Declared a dividend of $0.29 per share.
• May 5, 2023: Declared a dividend of $0.29 per share.

The dividend payout ratio, which measures the proportion of earnings paid out as dividends, can indicate the sustainability of dividend payments. A lower ratio suggests the company has room to increase dividends in the future.

Keep an eye on what analysts are saying about the stock:

• Analyst Consensus: Track whether analysts rate BMI as a 'buy,' 'hold,' or 'sell.' Consensus estimates can influence investor decisions and provide insights into the stock's potential upside or downside.

By considering these factors, investors can make a more informed decision about the valuation of Badger Meter, Inc. (BMI) and its potential as an investment. For more insights into the company's strategic direction, explore the Mission Statement, Vision, & Core Values of Badger Meter, Inc. (BMI).

Badger Meter, Inc. (BMI) Risk Factors

Understanding the risks Badger Meter, Inc. (BMI) faces is crucial for investors. These risks can stem from both internal and external factors, significantly impacting the company's financial health. A comprehensive analysis includes industry competition, regulatory changes, and overall market conditions.

Here's an overview of potential risks:

• Industry Competition: The water technology market is competitive. Badger Meter, Inc. (BMI) faces competition from established players and new entrants, which could pressure pricing and market share.
• Regulatory Changes: Changes in environmental regulations regarding water usage and quality can affect the demand for Badger Meter, Inc.'s (BMI) products. Compliance with new regulations may also increase costs.
• Market Conditions: Economic downturns can reduce municipal and industrial spending on infrastructure projects, impacting Badger Meter, Inc.'s (BMI) sales.

Operational, financial, and strategic risks are often highlighted in earnings reports and filings. These include:

• Supply Chain Disruptions: Disruptions in the supply chain can increase production costs and delay product delivery, affecting revenue and profitability.
• Cybersecurity Threats: As Badger Meter, Inc. (BMI) becomes more reliant on digital technologies, it faces increasing risks from cybersecurity threats, which can compromise data and disrupt operations.
• Product Innovation: Failure to innovate and keep pace with technological advancements can lead to a loss of market share.

Mitigation strategies are essential for managing these risks. While specific plans may vary, common strategies include:

• Diversification: Expanding into new markets and product lines to reduce reliance on specific sectors or regions.
• Investment in R&D: Allocating resources to research and development to foster innovation and maintain a competitive edge.
• Strengthening Cybersecurity: Implementing robust cybersecurity measures to protect data and systems from cyber threats.
• Building Resilient Supply Chains: Diversifying suppliers and building inventory buffers to mitigate supply chain disruptions.

For more insights into Badger Meter, Inc.'s (BMI) financial health, you can explore: Breaking Down Badger Meter, Inc. (BMI) Financial Health: Key Insights for Investors.

Badger Meter, Inc. (BMI) Growth Opportunities

Badger Meter, Inc. (BMI) demonstrates promising future growth prospects, driven by several key factors. These include continuous product innovations, strategic market expansions, potential acquisitions, and effective partnerships.

Key growth drivers for Badger Meter, Inc. (BMI) include:

• Product Innovations: Badger Meter consistently invests in research and development to introduce innovative flow measurement solutions.
• Market Expansions: Expanding into new geographic markets and industries provides additional avenues for growth.
• Acquisitions: Strategic acquisitions can broaden Badger Meter's product portfolio and market reach.

Analysts' estimates provide a quantitative outlook on Badger Meter, Inc.'s (BMI) financial future. While specific figures can vary among different sources and may be subject to change, these estimates typically include projections for revenue growth and earnings per share (EPS). For instance, revenue growth projections might estimate an increase of 5-10% annually, reflecting the anticipated benefits from the company's growth strategies. Earnings estimates often accompany these revenue forecasts, providing a view on profitability and shareholder value.

Strategic initiatives and partnerships are also pivotal in shaping Badger Meter, Inc.'s (BMI) growth trajectory. Collaborations with technology providers, distributors, or other industry players can enhance the company's capabilities and market access. These partnerships might focus on integrating new technologies into Badger Meter's products, expanding distribution networks, or jointly developing solutions for specific customer needs. Such initiatives can lead to increased market penetration and revenue streams.

Badger Meter, Inc. (BMI) holds several competitive advantages that position it favorably for sustained growth:

• Technological Leadership: A strong focus on innovation allows Badger Meter to maintain a competitive edge through advanced and reliable products.
• Established Market Presence: Long-standing relationships and a solid reputation in the flow measurement industry provide a stable foundation for expansion.
• Diverse Product Portfolio: Offering a wide range of products and services reduces dependence on any single market or customer.

Here's an example of how future revenue growth could be projected:

For more insights into the company's values and mission, you can refer to: Mission Statement, Vision, & Core Values of Badger Meter, Inc. (BMI).