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Badger Meter’s share price has fallen 38.2% over the past year yet is still screening as expensive, with both the Discounted Cash Flow (DCF) intrinsic value estimate and market multiples pointing to the stock trading at a premium rather than a clear bargain.
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Over the last 5 years, Badger Meter has returned 55.9% including recent weakness, which means long term holders are still ahead even after the drawdown.
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Expectations for future cash generation from Badger Meter’s metering and water technology business can support a premium, but any disappointment in cash flow timing or project execution may weigh heavily on that valuation.
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Across Simply Wall St’s broader checks, Badger Meter scores 1 out of 6 on valuation, which suggests the stock currently leans expensive rather than offering clear value.
The issue now is whether Badger Meter’s premium price is adequately supported by its cash flow outlook, or if recent share price weakness still has further to run before the valuation looks more comfortable.
Find out why Badger Meter’s -38.2% return over the last year is lagging behind its peers.
Is Badger Meter Getting Expensive on Cash Flow?
The Discounted Cash Flow (DCF) model here uses Badger Meter’s projected cash generation to estimate what the stock might be worth today. Based on the latest twelve month Free Cash Flow of about $170.5 million and an assumption that cash flows continue growing rather than shrinking, the 2 Stage Free Cash Flow to Equity model arrives at an intrinsic value of about $129 per share.
That compares to a current share price that sits about 15.6% above this estimate. On this cash flow view, Badger Meter screens as overvalued. The projections assume steady, positive free cash flow over the coming years rather than a sharp acceleration. This means there is not a large cushion in the numbers if cash generation or project timing ends up weaker than expected.
On this Discounted Cash Flow view, the stock currently looks overvalued rather than offering a clear margin of safety.
Our Discounted Cash Flow (DCF) analysis suggests Badger Meter may be overvalued by 15.6%. Discover 47 high quality undervalued stocks or create your own screener to find better value opportunities.
Has Badger Meter Run Too Far on Earnings?
P/E is a useful way to look at Badger Meter because earnings are a key driver of how investors typically value established industrial and technology businesses. On this metric, Badger Meter trades at about 33.4x earnings, which sits above the Electronic industry average of roughly 30.5x and below a peer group average of about 50.6x.
