Several law firms have launched securities class actions against Badger Meter (BMI) after its Q1 2026 earnings report, which included a 10% decline in utility water sales and weaker than expected revenue figures.

Since the Q1 2026 earnings miss and subsequent class action announcements, Badger Meter’s share price has been under pressure, with the year to date share price return down 18.26% and the 1 year total shareholder return down 39.52%, although the 5 year total shareholder return of 52.12% shows a different picture over a longer horizon.

If recent legal headlines around Badger Meter have you reassessing where risk and growth might line up, it could be a useful moment to broaden your search with 34 power grid technology and infrastructure stocks

So is Badger Meter’s sharp share price drop a clean signal that the business has changed, or has sentiment simply swung too far? The next step is to see what the current valuation actually reflects.

Most Popular Narrative: 1.9% Undervalued

With Badger Meter’s last close at $144.18 and the most followed fair value estimate sitting at $147.00, the current gap is small but meaningful enough for analysts to build a detailed story around the stock.

The rapid expansion and integration of IoT-enabled products and real-time analytics, as seen in the rollout of BEACON and new machine-learning-enabled products like Cobalt, are accelerating customer adoption of recurring, higher-margin software and data solutions. This is contributing to improved revenue visibility and ongoing net margin enhancement.

Curious what sits behind that fair value for Badger Meter? The narrative focuses on compounding earnings, steadier margins and a premium future multiple that has been carefully stress tested.

Result: Fair Value of $147.00 (UNDERVALUED)

However, Badger Meter’s reliance on large municipal AMI projects and exposure to higher input costs, including potential tariff changes, could challenge the current valuation narrative.

Another View: Badger Meter Through a P/E Lens

The first narrative around Badger Meter leans on earnings power to support a fair value of $147.00, but the current P/E of 32.2x tells a more cautious story. That multiple sits below a peer average of 51.5x yet above the US Electronic industry at 30.8x, and also above an estimated fair ratio of 26x. This means the share price could be exposed if future growth or margins fall short of forecasts. When the stock trades richer than a fair ratio that the market could move toward, are you comfortable with how much is already priced in?

To pressure test those earnings assumptions further, it is worth looking at how the numbers stack up in a full valuation breakdown. This includes that higher P/E versus the fair ratio, peers and the wider industry, using See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Badger Meter for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With all this mixed sentiment around Badger Meter, the real question is what you make of the trade off between recent setbacks and future potential rewards. Take a moment to review the key positives in detail through 1 key reward

Looking for more investment ideas beyond Badger Meter?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.