BMI
Badger Meter, Inc.
$144.18
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 3.3% below fair value
You pay
$144.18
Bear
$107.07
Fair
$149.16
Bull
$192.49
Bear
$107.07
-25.7%
7% stage 1 growth, 11% discount
Fair
$149.16
+3.5%
12% stage 1 growth, 11% discount
Bull
$192.49
+33.5%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
24.5x
Market is pricing in (growth)
11.7%
vs 11.9% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $158.50 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $149.16 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions