RBC Capital adjusted its valuation on Badger Meter Inc. by lowering the price target to $191.00 from $229.00, while retaining an Outperform rating on the water metering technology company. The revised target still implies material upside from the stock's most recent quote of $146.32, a level that InvestingPro data indicate is near the 52-week low after the share price fell nearly 30% over the last year.
The price-target cut followed the company's fourth-quarter 2025 results, which presented a mixed picture. Management delivered a modest operating beat that RBC attributed principally to stronger gross margins. For the quarter, Badger Meter reported an earnings per share of $1.14, slightly below the consensus expectation of $1.16. Quarterly revenue came in at $220.7 million, also under analysts' forecasts of $231.98 million.
Despite the revenue and EPS misses in the quarter, the company sustained a robust gross-profit margin of 41.7% and reported 10.9% revenue growth for the full fiscal year. Organic revenue growth in the quarter was about 2%, however, which fell short of RBC's projection of roughly 7% - a shortfall the firm flagged in its note accompanying the price-target revision.
RBC highlighted a material contract win for Badger Meter related to Advanced Metering Infrastructure (AMI) deployments in Puerto Rico. The contract covers approximately 1.6 million service connections and represents one of the largest AMI projects globally referenced in the coverage. RBC indicated that the timing of this AMI deployment is central to near-term revenue phasing.
Following the earnings release, shares declined about 11% as market participants reacted to management's guidance that 2026 growth will be weighted toward the second half of the year because of AMI project scheduling. RBC characterized that investor response as "overdone," saying the pullback offers "an attractive entry point" for prospective buyers. The firm also noted that Badger Meter still expects positive growth in 2026, in contrast to competitor Neptune, which projects sales declines.
For investors and analysts, the quarter underlined both strengths and near-term uncertainties. The 41.7% gross margin and full-year revenue expansion point to solid underlying unit economics and margin resilience, while the softer organic quarterly growth and the EPS and revenue shortfalls underscore sensitivity to project timing and demand cadence. RBC's maintained Outperform rating suggests the firm sees longer-term upside despite the shorter-term timing risk.
Other commentary around the results touched on how analysts and investors may revisit ratings and forecasts in response to this set of numbers, though no specific upgrades or downgrades were reported in the coverage cited here. The company's recent results and guidance are being monitored by the market for indications of how AMI deployments will influence revenue recognition and growth pacing in 2026.
For those evaluating valuation, a range of analytical tools is often used to assess whether the current price represents a buying opportunity. Some services provide blended valuation models to estimate fair value, though use of any third-party calculator should be weighed against individual investor assumptions and time horizons.
In short, RBC's adjustment narrows the gap between current market pricing and its revised outlook, while keeping a constructive stance on Badger Meter's medium-term growth potential amid project timing uncertainty.