• If you are wondering whether Badger Meter's current share price still makes sense after a long run as a quality water technology name, you are not alone.
• The stock closed at US$145.88, with a 1% gain over the last week, a return of 24.3% over 3 years and 42.7% over 5 years, set against a 19.8% decline over 30 days, a 17.3% decline year to date and a 31.9% decline over 1 year.
• Recent attention on water infrastructure, measurement and monitoring solutions has kept companies like Badger Meter on many investors' radars. Sector wide conversations about long term demand for metering and smart water management technology help frame these price moves and set expectations around what investors are willing to pay.
• Against this backdrop, Badger Meter currently has a valuation score of 2 out of 6, which means it screens as undervalued on 2 of 6 checks. The rest of this article will walk through those methods before finishing with a more helpful way to think about what the valuation really implies for you.

Badger Meter scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Badger Meter Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and discounting them back to a present value.

For Badger Meter, the model uses a 2 Stage Free Cash Flow to Equity approach built on cash flow projections. The latest twelve month Free Cash Flow is about $169.1 million. Analysts provide explicit estimates through 2029, such as $169.4 million for 2026 and $218.5 million by 2029, with further annual projections out to 2035 extrapolated by Simply Wall St from those expectations.

Each of these future cash flows, for example the discounted $156.4 million for 2026 and $158.6 million for 2029, is pulled back to today and summed to reach an estimated intrinsic value of about $145.17 per share.

Against the recent share price of US$145.88, the DCF suggests Badger Meter is around 0.5% overvalued, which is effectively a tight match rather than a clear discount or premium.

Result: ABOUT RIGHT

Badger Meter is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Badger Meter Price vs Earnings

For a profitable company like Badger Meter, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. Investors usually accept a higher P/E when they expect stronger growth or see lower risk, and a lower P/E when growth expectations are more modest or risks feel higher.

Badger Meter currently trades on a P/E of 30.35x. That sits above the Electronic industry average of 26.22x and below the peer group average of 37.45x, so the market is pricing it at a premium to the broader industry but not at the top end of its closer peer set.

Simply Wall St's Fair Ratio for Badger Meter is 23.23x. This is a proprietary estimate of what a reasonable P/E could be once you factor in elements such as earnings growth characteristics, profit margins, industry, market cap and specific risks. Because it adjusts for these company level traits, the Fair Ratio can be more tailored than a simple comparison against industry or peer averages.

With the current P/E of 30.35x sitting above the Fair Ratio of 23.23x, the stock screens as trading at a richer multiple than that customised benchmark.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 22 top founder-led companies.

Upgrade Your Decision Making: Choose your Badger Meter Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Badger Meter’s future to a clear fair value number. A Narrative is your story about the company, where you set assumptions for future revenue, earnings and margins, and the platform then links that story to a financial forecast and an implied fair value. On Simply Wall St, millions of investors build and share these Narratives on the Community page, so you can see how others are thinking and adjust your own view quickly and easily. Narratives also help you act, because you can compare your Fair Value to today’s share price and decide whether the gap is large enough for you to consider buying or selling. When new information such as earnings or news appears, the Narrative updates automatically so your fair value view stays current rather than static. For Badger Meter, one investor might see a relatively cautious fair value while another sees a much higher figure based on stronger assumptions for long term demand and profitability.

Do you think there's more to the story for Badger Meter? Head over to our Community to see what others are saying!

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.