Q4 2023 Earnings Summary
Reported on Jan 7, 2025 (Before Market Open)
Pre-Earnings Price$152.32Last close (Jan 25, 2024)
Post-Earnings Price$151.70Open (Jan 26, 2024)
Price Change
$-0.62(-0.41%)
- Strong Backlog and Positive Outlook for High Single-Digit Growth: Badger Meter's backlog entering 2024 is still higher than it was coming into 2023, indicating robust demand and continued optimism. The company expects high single-digit growth over the next five years, reinforcing confidence in its strategic outlook.
- Accelerated Growth in Water Quality and Pressure Monitoring Businesses: The company's water quality and pressure monitoring segments are growing faster than high single digits, potentially contributing more significantly to growth over the strategic cycle. This highlights the success of recent acquisitions and the expanding market for these solutions.
- Sustained Incremental Margins and Operating Profit Expansion: Badger Meter maintains its target of 25% incremental margins at both the operating profit and EBITDA levels. The company continues to leverage Selling, Engineering, and Administrative (SEA) expenses, improving SEA as a percentage of sales and driving operating profit expansion year-over-year through continuous improvement.
- The company expects growth rates to moderate from previous double-digit percentages to high single digits over the next strategic cycle, indicating a potential slowdown in growth momentum.
- Management indicated that growth will not always be linear, with possible quarterly fluctuations, which could lead to uneven financial performance.
- The competitive environment may become more challenging as supply chains normalize and competitors improve their capabilities, including new entrants like Kamstrup, which could impact Badger Meter's market position.