Badger Meter, Inc. (BMI): A Bull Case Theory

We came across a bullish thesis on Badger Meter, Inc. (BMI) on Crack the Market’s Substack by Ozeco. In this article, we will summarize the bulls’ thesis on BMI. Badger Meter, Inc. (BMI)’s share was trading at $242.75 as of 13^th June. BMI’s trailing and forward P/E were 53.47 and 51.81 respectively according to Yahoo Finance.

Badger Meter stands out as one of the highest quality names in the market, combining best-in-class execution with significant margin expansion potential in a structurally attractive industry. The company is deeply aligned with long-term trends in resource efficiency through its focus on Advanced Metering Infrastructure (AMI) and Software as a Service (SaaS), both of which are increasingly critical amid growing regulatory scrutiny and global sustainability efforts.

Operating in an oligopolistic North American water meter market, where approximately 85% of demand stems from replacements, Badger benefits from a highly fragmented and risk-averse utility customer base. This dynamic ensures a slow but steady shift from legacy mechanical meters to higher-value connected static meters, supporting mid- to high-single-digit organic growth over the next two decades. This mix shift, coupled with modest pricing power and installed base expansion, provides a durable long-term runway.

Importantly, Badger’s SaaS revenue, which has grown at a robust 28% CAGR from 2019 to 2024, further strengthens the resilience and predictability of its revenue base while supporting gross margins above the historical 38–40% target range.

Despite traditionally trading at a premium, Badger’s recent valuation derating presents a rare entry point into a business that combines defensive characteristics with secular growth drivers. Though the stock still commands a high multiple, it is now more reasonably priced given its durable competitive positioning, recurring revenue momentum, and long-term visibility.

For investors seeking quality compounded by structural tailwinds and operational excellence, Badger Meter represents a compelling opportunity.

Previously, we covered Durable Value Creators’ bullish thesis on Badger Meter (BMI), emphasizing its smart water ecosystem, SaaS growth, and regulatory tailwinds. Since then, the stock is up ~11%. Crack the Market’s update reinforces BMI’s quality, noting its oligopoly position, margin upside, and structural growth. With SaaS revenue compounding at 28% and valuation more reasonable, BMI remains a compelling, defensive long-term compounder.

Badger Meter, Inc. (BMI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Badger Meter, Inc. (BMI) at the end of the first quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of BMI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.