Badger Meter just turned in a Q3 2026 report that lit a fire under the stock, with the share price jumping 13.5% to close at $149.64 after the release. The headline is simple: earnings per share of about $1.25 on revenue of roughly $235.9 million came alongside base operating margin above 20%, which matters far more for a metering and water tech specialist than a small revenue move. The market is cheering hard. The real question is whether this surge reflects a belated recognition of resilient profitability or an emotional chase after one strong margin print.
Love Badger Meter’s double digit margin and clean EPS print, but worry the move reflects more excitement than enduring quality. Compare this jumpy reaction to companies screened for sturdier fundamentals in our list of solid balance sheet and fundamentals stocks (26 results)
Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs. Q3 2025): US$235.9 million vs. US$235.7 million (broadly flat year over year)
- Net Income, excl. extra items (Q3 2026 vs. Q3 2025): US$35.9 million vs. US$35.1 million (up about 2%)
- Basic EPS (Q3 2026 vs. Q3 2025): US$1.25 vs. US$1.19 (up about 5%)
- Base Operating Margin (Q3 2026 vs. Q3 2025): 20.9% vs. 19.6% (expansion of about 130 basis points)
Ask Charlie what Badger Meter isn’t guiding for in 2027.
Evaluating Badger Meter’s Recurring Growth Milestones
The bullish story argues that Badger Meter’s water software and monitoring push can turn awarded projects into durable, higher margin growth.
"The main thing that has to go right is that Badger Meter converts its larger pipeline of awarded AMI projects and expanded sewer, stormwater and water quality portfolio into the high single digit organic revenue CAGR and 25 to 30% incremental EBITDA margins management is targeting over the next five years."
Q3 shows partial progress. Base sales were slightly weaker year over year, so the high single digit organic growth ambition is not visible yet. Mix is doing the heavy lifting instead, with gross margin at 41.9% and base operating margin above 20% as AMI ramps, OneNetwork launches and UDlive contributes.
One Narrative has put a figure on that disagreement. → See the Narrative with its lower Fair Value, assumptions and all.
Badger Meter: Order Risk Still Overshadows Smooth Growth
The cautious view says Badger Meter’s project pipeline creates more timing risk than comfort when utilities slow or reshuffle work.
"Management highlights a large cohort of awarded but not yet started AMI projects covering 2.6 to 3.6 million connections. However, the 9% sales decline in Q1 2026 and guidance that 2026 growth is heavily weighted to Q4 show how dependent Badger Meter is on timely project ramps, leaving revenue and earnings exposed if awards are rephased, respecified or take longer to convert into billable work."
Q3 does not clear that hurdle. Reported revenue was flat and base sales slipped, and full year organic revenue is now guided to decline low single digits. Project ramps helped margins, yet the reliance on a Q4 lift confirms the timing overhang rather than resolving it.
Hunt For Mispriced Earnings Power
Badger Meter just showed how one quarter can reshape expectations without settling the longer term debate. The real opportunity is finding stocks that could be undervalued before the market reassesses their earnings power.
- Company 1 - 33% below our estimate - focuses on supplying high end AI racks as data centre operators convert capacity toward GPU heavy workloads.
- Company 2 - 35% below our estimate - leans into a swelling advisory pipeline as new senior hires pursue larger capital markets and private deals.
- Company 3 - 49% below our estimate - targets a record backlog of mega projects as disciplined bidding shapes long dated military and infrastructure construction work.
Three companies from the same screener. Open every one of the 30 undervalued companies on it →
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