Shares of Badger Infrastructure Solutions (TSX:BDGI) are starting to become difficult to ignore, not only for mid-cap investors, but also for Canadians seeking to diversify further while cranking up the growth potential. The stock has been a massive winner in the past year, now up close to 88%. Of course, it’s that late-April spike that’s made the infrastructure service provider a talk of the town again.
And while the opportunity to buy the early-2026 dip has now come and gone, I still think buying at new highs could still be a winning long-term move, especially when you consider how strong the tailwinds at the company’s back are. Time will tell if shares of BDGI will come in after a 25% or so spike to cap off last month. As more investors discover the $2.76 billion growth story, the more growth-focused investors might be willing to pay an even heftier multiple.
The latest first-quarter results weren’t just good; they saw explosive growth that caught just about everyone off guard as investors began to fear that the best of the rally was over. Indeed, it has not been easy sledding for Badger this year, with the shares slipping into a bear market before a single quarter sent it right back to new highs, just north of $84 per share.
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What a stellar quarter. More surprises might be ahead!
Today, the stock goes for $82, and while the Q1 blowout is priced in (18% revenue growth), I’m inclined to think that more such surprises will be in the cards, especially as analysts look to play catch-up. It’s hard to find anyone who wasn’t completely shocked and blown away by the number. As Badger moves ahead with its fleet expansion, I think the firm may very well have one of the more predictable high-growth profiles in the mid-cap scene.
With the energy sector kicking into high gear (a major segment that Badger serves) while AI gives fibre and grid infrastructure a shot in the arm, it’s hard not to think that Badger might be entering a bit of a Goldilocks kind of environment. Personally, I think much of the tailwinds facing Badger are more structural. Infrastructure has been a place to be, and Badger has been a rather stealthy way to play it.
While I’m no fan of paying a premium to chase overbought stocks, I do think that Badger stands out as a name that’s worth every bit of its premium multiple, especially when you consider how much of an uplifting effect the firm’s fleet expansion will give in the latter half of the year.
Badger stock looks expensive, but it might actually be a bargain!
The stock goes for 26.8 times trailing price-to-earnings (P/E) as of the time of this writing. That’s on the expensive side for Badger. But when you consider the solid execution and the earnings momentum, I think an even higher multiple might be more appropriate.
What’s most exciting, in my view, is how AI data centre builds could affect demand for Badger’s “daylighting” services. The grid still needs to prepare for what’s to come, and Badger remains an under-the-radar way to play it, at least in my view.
