Do You Believe in Badger Meter's (BMI) Long-Term Growth Potential?

Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net of fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile in the quarter. The “low quality” stocks rally persisted in the quarter, but at a slower pace compared to earlier quarters. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks like Badger Meter, Inc. (NYSE:BMI). Badger Meter, Inc. (NYSE:BMI) is a leading manufacturer of flow measurement, quality, control, and communication solutions primarily for the municipal water utility market. On February 18, 2026, Badger Meter, Inc. (NYSE:BMI) stock closed at $158.20 per share. One-month return of Badger Meter, Inc. (NYSE:BMI) was -8.09%, and its shares are down 27.49% over the past twelve months. Badger Meter, Inc. (NYSE:BMI) has a market capitalization of $4.662 billion.

Conestoga Capital Advisors stated the following regarding Badger Meter, Inc. (NYSE:BMI) in its fourth quarter 2025 investor letter:

"Badger Meter, Inc. (NYSE:BMI) is a leading provider of water meters and connected smart-metering solutions primarily for municipal water utilities. The company exhibits hallmarks of high quality, operating in an oligopolistic water-metering market providing must-have solutions, replacement-driven recurring revenue, healthy capital structure, and good management. Decades of consistent execution, recurring revenues, and attractive free-cash-flow generation supports BMI's ability to grow durably and compound value through economic cycles."

Badger Meter, Inc. (NYSE:BMI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 28 hedge fund portfolios held Badger Meter, Inc. (NYSE:BMI) at the end of the third quarter, compared to 32 in the previous quarter. Badger Meter, Inc. (NYSE:BMI) reported total sales of $221 million in Q4 2025, an increase of 8% year-over-year. While we acknowledge the potential of Badger Meter, Inc. (NYSE:BMI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Badger Meter, Inc. (NYSE:BMI) and shared a list of best long term low risk stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.