|
Related Topics
|
Category: Stock Market and Badger Meter
Date: 21 October 2019 Stock Price: $60.17 We take a look at the 3rd quarter earnings report of their 2019 fiscal year of Badger Meter a provider of flow measurement, control and communications solutions whose clients include water utilities and municipalities.
|
About Badger Meter
Badger Meter is an innovator in flow measurement, control and communications solutions, serving water utilities, municipalities, and commercial and industrial customers worldwide. The company’s products measure water, oil, chemicals, and other fluids, and are known for accuracy, long-lasting durability and for providing valuable and timely measurement data.
Overview of Badger Meter's latest earnings report
- Net sales: $108.646 million (down from $110.630 million for the same quarter of the previous year)
- Net sales: decreased by -1.8% over the last 12 months
- Cost of sales: $66.976 million (up from $66.684 million for the same quarter of the previous year)
- Cost of sales increased by 0.43% over the last 12 months
- Net income: $12.721 million (up from $2.851 million for the same quarter of the previous year)
- Diluted earnings per share: $0.44 (up from $0.10 for the same quarter of the previous year)
- PE ratio: 36
- Dividend declared: $0.17
- Dividend yield: 1.1%
- Diluted weighted-average shares outstanding: 29.193 million (down from 29.197 million for the same quarter of the previous year)
- Cash and cash equivalents: $37.728 million
- Cash and cash equivalents per share: $1.29
- Cash and cash equivalents makes up 2.14% of Badger Meter's market capital
- Cash and cash equivalents makes up 9.03% of Badger Meter's total assets
- Accounts receivable: $61.406 million
- Accounts receivable makes up 14.7% of Badger Meter's total assets
- Inventories: $84.835 million
- Inventories makes up 20.3% of Badger Meter's total assets
- Stockholders equity in Badger Meter: $323.639 million
- Stockholders equity per share: $11.08
- So Badger Meter is trading at 5.43 times its stockholders equity which is outside the expected range of between 2 and 4 which most firms ten to trade at.
- Cash generated from operations: $20.236 million
- Cash generated from operations per share: $0.69
Badger Meter's management commentary on the results and business outlook
MILWAUKEE--(BUSINESS WIRE)-- Badger Meter, Inc. (NYSE: BMI) today reported results for the third quarter ended September 30, 2019.
“We were pleased with the sequential improvement in sales, with growth in the domestic municipal water market against a difficult comparison, and continued interest in our new technology products. In the latter half of the quarter, we began shipping our new three and four-inch ultrasonic meters incorporating our D-Flow technology. ORION® LTE-M radio installations at early adopters and several key customers are ramping, while pilot testing at others continues. Our margins and cash flow results demonstrate the impact of our continuous improvement efforts. Overall, it was a solid quarter across a variety of operational and financial measures and I want to thank my Badger Meter colleagues across the globe for their efforts,” said Kenneth C. Bockhorst, President and Chief Executive Officer of Badger Meter.
Municipal water sales decreased 3% from the strong comparable prior year quarter; however, domestic municipal water sales grew by 2%. International municipal water utility sales declined as anticipated, as last year’s large Middle East order did not repeat. The domestic increase, despite a near-record comparable, was the result of solid market demand, the launch of the new three and four-inch commercial E-Series® Ultrasonic meters and initiation of recent key customer project wins. A variety of additional customers are undergoing pilot tests of newer technologies, most notably with ORION® Cellular LTE-M endpoints, a common practice that can result in order deferments. Sales of flow instrumentation products grew 1% year-over-year with modest increases across most industrial end markets.
Outlook
Bockhorst continued, “The municipal spending market remains healthy and we continue to be encouraged by the interest level, engagement and pilot testing of our leading technologies. As we have historically experienced, the introduction of innovative solutions in our markets can create order pauses and sales unevenness in the short-term. However, our customers contemplate the long-term in making their smart water investments and therefore, we continue to support technology and capabilities that offer improved performance and economics over that horizon.
Looking beyond demand trends, our profit margins continue to benefit from positive sales mix and continuous improvement activities across all aspects of our operations, and our balance sheet provides ample capacity to execute on disciplined, strategic acquisitions.” Bockhorst concluded, “We remain confident in our long term outlook as our broad range of proven smart-water solutions solve customer challenges and work to preserve the world’s most precious resource.”
“We were pleased with the sequential improvement in sales, with growth in the domestic municipal water market against a difficult comparison, and continued interest in our new technology products. In the latter half of the quarter, we began shipping our new three and four-inch ultrasonic meters incorporating our D-Flow technology. ORION® LTE-M radio installations at early adopters and several key customers are ramping, while pilot testing at others continues. Our margins and cash flow results demonstrate the impact of our continuous improvement efforts. Overall, it was a solid quarter across a variety of operational and financial measures and I want to thank my Badger Meter colleagues across the globe for their efforts,” said Kenneth C. Bockhorst, President and Chief Executive Officer of Badger Meter.
Municipal water sales decreased 3% from the strong comparable prior year quarter; however, domestic municipal water sales grew by 2%. International municipal water utility sales declined as anticipated, as last year’s large Middle East order did not repeat. The domestic increase, despite a near-record comparable, was the result of solid market demand, the launch of the new three and four-inch commercial E-Series® Ultrasonic meters and initiation of recent key customer project wins. A variety of additional customers are undergoing pilot tests of newer technologies, most notably with ORION® Cellular LTE-M endpoints, a common practice that can result in order deferments. Sales of flow instrumentation products grew 1% year-over-year with modest increases across most industrial end markets.
Outlook
Bockhorst continued, “The municipal spending market remains healthy and we continue to be encouraged by the interest level, engagement and pilot testing of our leading technologies. As we have historically experienced, the introduction of innovative solutions in our markets can create order pauses and sales unevenness in the short-term. However, our customers contemplate the long-term in making their smart water investments and therefore, we continue to support technology and capabilities that offer improved performance and economics over that horizon.
Looking beyond demand trends, our profit margins continue to benefit from positive sales mix and continuous improvement activities across all aspects of our operations, and our balance sheet provides ample capacity to execute on disciplined, strategic acquisitions.” Bockhorst concluded, “We remain confident in our long term outlook as our broad range of proven smart-water solutions solve customer challenges and work to preserve the world’s most precious resource.”
Badger Meter (NYSE: BMI) stock price history
The image below, obtained from Google, shows the stock price history of Badger Meter over the last 5 years. And it's been a very good time for Badger Meter stockholders.5 years ago the stock was trading at around $26.70 a stock and its currently trading at $60.17 a stock. That's a very strong return of 125.4% provided to Badger Meter stockholders over the last 5 years. The stock of Badger Meter is trading at a lot closer to its 52 week high of $61.57 than it is to its 52 week low if $46.70. This is a clear indication to us that the short term sentiment of Badger Meter stock is very positive right now.
Recent coverage of Badger Meter
The following extract covering Badger Meter was obtained from Thestreet.com (article was published 29 August 2019)
In recent trading, shares of Badger Meter Inc (BMI - Get Report) have crossed above the average analyst 12-month target price of $51.00, changing hands for $51.39/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher — if things are looking up for the company, perhaps it is time for that target price to be raised.
In recent trading, shares of Badger Meter Inc (BMI - Get Report) have crossed above the average analyst 12-month target price of $51.00, changing hands for $51.39/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher — if things are looking up for the company, perhaps it is time for that target price to be raised.
Badger Meter (NYSE: BMI) latest stock valuation
So what is Badger Meter stock worth based on the release of their latest earnings report? Based on the group's latest earnings provided our valuation model provides a target (full value) price at $53.40 a Badger Meter stock (up slightly from our 2nd quarter 2019 earnings report valuation of Badger Meter). We therefore believe that the stock is slight overvalued.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $53.40. Thus we see a good entry point into Badger Meter stock at $48.10 or below. We expect the stock to pull back slight to levels closer to our target price in coming weeks and months as we cannot see how Badger will be able to maintain its current lofty valuation levels.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $53.40. Thus we see a good entry point into Badger Meter stock at $48.10 or below. We expect the stock to pull back slight to levels closer to our target price in coming weeks and months as we cannot see how Badger will be able to maintain its current lofty valuation levels.
Next earnings release for Badger Meter
It is expected that Badger Meter will release if 4th quarter and full fiscal 2019 results in late January 2020.