Value
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 7.5 |
| EV/EBITDA | 1.0 |
| Fwd P/E | 4.9 |
| PEG | 3.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 25.5x
- ▸PEG: 3.18
BMI · Why this verdict
Why Badger Meter (BMI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Revenue has contracted 9% with three of four recent quarters missing estimates — including a 24% shortfall in the most recent period — while the stock has already crossed above its price target; a confirmed technical downtrend and 89% end-market concentration compound the risk, leaving no clear case for new capital at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue has fallen 9% year-over-year and three of the last four quarters delivered earnings below consensus, including a 24% miss in the most recent quarter, pointing to deteriorating business momentum rather than a temporary soft patch. Growth breakdown | Revenue growth turns positive year-over-year and at least 3 of 4 rolling quarters deliver positive earnings surprises over the next 12 months. | ↑Improving |
| CounterA recovery in municipal infrastructure spending or a large contract award within the utility water segment could restore order volumes quickly given the concentrated nature of the customer base. | ||
Utility water products represent 89% of revenue and key inputs — brass castings, resins, and electronic subassemblies — rely on single suppliers, meaning any supply disruption or demand softness in that one channel could disproportionately impair the business. Bear case | Utility water revenue concentration falls below 75% as adjacent product lines grow, or management discloses dual-sourcing for at least one currently single-source material within 12 months. | ↓Deteriorating |
| CounterLong-cycle municipal procurement relationships may insulate revenue even in a broader economic slowdown, making the concentration a source of stability rather than a vulnerability in practice. | ||
The stock is below its 200-day moving average with that average's slope declining 6.1% over the past 30 days — a confirmed downtrend that has not yet been resolved despite some improvement in short-term momentum signals. Momentum breakdown | Price reclaims and holds above the 200-day moving average for at least 30 consecutive trading days, with the moving average slope flattening or turning positive. | ↓Deteriorating |
| CounterRising on-balance volume indicates institutional accumulation beneath the surface; if buyers sustain this pace, the moving average could flatten and the downtrend could reverse before the stock deteriorates materially. | ||
With 20% of the float sold short and implied volatility at 77%, there is a significant positioning overhang that could amplify price swings in either direction and adds meaningful uncertainty to any near-term position outcome. Risk breakdown | Short interest falls below 10% of float within 12 months, either through fundamental improvement that removes the bearish thesis or through a short-covering event. | ↓Deteriorating |
| CounterIf fundamental deterioration continues, the elevated short interest may prove directionally correct rather than a contrarian signal, and the high implied volatility accurately reflects genuine uncertainty about the business trajectory. | ||
Revenue has fallen 9% year-over-year and three of the last four quarters delivered earnings below consensus, including a 24% miss in the most recent quarter, pointing to deteriorating business momentum rather than a temporary soft patch.
↑ImprovingGrowth breakdown
- Expectation
- Revenue growth turns positive year-over-year and at least 3 of 4 rolling quarters deliver positive earnings surprises over the next 12 months.
CounterA recovery in municipal infrastructure spending or a large contract award within the utility water segment could restore order volumes quickly given the concentrated nature of the customer base.
Utility water products represent 89% of revenue and key inputs — brass castings, resins, and electronic subassemblies — rely on single suppliers, meaning any supply disruption or demand softness in that one channel could disproportionately impair the business.
↓DeterioratingBear case
- Expectation
- Utility water revenue concentration falls below 75% as adjacent product lines grow, or management discloses dual-sourcing for at least one currently single-source material within 12 months.
CounterLong-cycle municipal procurement relationships may insulate revenue even in a broader economic slowdown, making the concentration a source of stability rather than a vulnerability in practice.
The stock is below its 200-day moving average with that average's slope declining 6.1% over the past 30 days — a confirmed downtrend that has not yet been resolved despite some improvement in short-term momentum signals.
↓DeterioratingMomentum breakdown
- Expectation
- Price reclaims and holds above the 200-day moving average for at least 30 consecutive trading days, with the moving average slope flattening or turning positive.
CounterRising on-balance volume indicates institutional accumulation beneath the surface; if buyers sustain this pace, the moving average could flatten and the downtrend could reverse before the stock deteriorates materially.
With 20% of the float sold short and implied volatility at 77%, there is a significant positioning overhang that could amplify price swings in either direction and adds meaningful uncertainty to any near-term position outcome.
↓DeterioratingRisk breakdown
- Expectation
- Short interest falls below 10% of float within 12 months, either through fundamental improvement that removes the bearish thesis or through a short-covering event.
CounterIf fundamental deterioration continues, the elevated short interest may prove directionally correct rather than a contrarian signal, and the high implied volatility accurately reflects genuine uncertainty about the business trajectory.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.2 |
| ROA | 7.1 |
| Gross margin | 4.3 |
| Op margin | 7.1 |
| Net margin | 7.1 |
| Current ratio | 8.3 |
| FCF quality | 7.1 |
| Moat | 5.9 |
| Piotroski F | 7.8 |
- ▸Strong Piotroski F-Score: 7/9
Growth
0.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.9 |
| EPS growth | 0.0 |
- ▸Declining revenue: -7%
Momentum
1.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 2.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.6%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 6.9 |
| Price target | 7.8 |
- ▸Light analyst coverage (9.0) — signal dampened
- ▸Analyst upside: 21%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.2 |
| quality rank | 6.8 |
| growth rank | 0.0 |
- ▸Conservative debt levels
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.9 |
| support resistance | 7.8 |
| 52w position | 0.3 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 2.4 |
| volatility | 0.0 |
| put call | 8.1 |
| implied vol | 5.1 |
| max pain risk | 3.0 |
| beta | 9.2 |
| debt equity | 9.9 |
| news risk | 5.5 |
- ▸Short squeeze setup: 19% short, quality 7.5
- ▸Above max pain $80
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 8.5 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend aristocrat: 1.3% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:86d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:1.5<4.5
- ASYMMETRY:0.5<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
0.52
Upside
+5.3%
Downside
10.1%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 32, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -48% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:1.5<4.5, ASYMMETRY:0.5<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.52 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Quality at 6.8, and Sentiment at 6.8; the weakest are Growth at 0.5, Momentum at 1.5, and Value at 4.6. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.52 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue Contraction Earnings Misses
Trip ifRevenue growth exceeds 0% year-over-year for 2 consecutive quarters.
- P2Single Segment Supplier Concentration
Trip ifUtility water product revenue falls below 75% of total revenue for 2 consecutive quarters.
- P3Confirmed Technical Downtrend
Trip ifPrice closes above the 200-day moving average and stays above for 30 consecutive trading days.
- P4Elevated Short Interest Overhang
Trip ifShort interest falls below 10% of float.