Modine Manufacturing Co
MOD
$241.52
+2.84%
Modine Manufacturing Co is a provider of engineered thermal management solutions, operating primarily in the automotive parts industry through its Climate Solutions and Performance Technologies segments. The company has established itself as a key supplier of heat transfer components, such as radiators and charge air coolers, to original equipment manufacturers in both on- and off-highway vehicular markets. The current investor narrative is heavily focused on the company's strategic pivot and growth within the data center thermal management market, as evidenced by a significant $296.9 million revenue segment, driving a debate around its transformation from a cyclical auto parts supplier to a player in the high-growth digital infrastructure space. This strategic shift is underpinning a reevaluation of its growth profile and valuation multiples.…
MOD
Modine Manufacturing Co
$241.52
MOD 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Modine Manufacturing Co's 12-month outlook, with a consensus price target around $313.98 and implied upside of +30.0% versus the current price.
Average Target
$313.98
7 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
7
covering this stock
Price Range
$193 - $314
Analyst target range
Modine is covered by 7 analysts, indicating a moderate level of institutional research interest. The consensus sentiment is bullish, as evidenced by recent reiterated 'Buy' and 'Outperform' ratings from firms like DA Davidson and Oppenheimer throughout January and February 2026. The average target price is not explicitly provided, but the estimated EPS average for the forward period is $10.16, which, when combined with the forward PE of 29.75, implies a consensus price target of approximately $302, suggesting significant upside from the current price of $219.32. The analyst target range for EPS is wide, from a low of $8.03 to a high of $12.61, reflecting substantial uncertainty or a range of scenarios regarding the company's future execution and growth trajectory. The high target likely assumes successful penetration and margin expansion in the data center market, along with sustained performance in legacy segments. The low target may factor in potential execution missteps, cyclical downturns in automotive, or increased competition. The recent pattern of institutional ratings shows consistent bullish reaffirmations, not downgrades, following the stock's major price move, indicating analyst confidence in the fundamental story remains intact.
Bulls vs Bears: MOD Investment Factors
The bull case, centered on a transformative growth narrative in data center thermal management, currently holds stronger evidence due to explosive revenue growth, powerful technical momentum, and sustained analyst conviction. However, the bear case presents a formidable counter-argument grounded in a severe, recent collapse in quarterly profitability that threatens the stock's premium valuation. The single most important tension in the investment debate is whether the Q3 net loss of -$47.4 million is a temporary anomaly related to investment for growth or the first sign of fundamental deterioration in the face of high expectations. The resolution of this profitability question will determine if MOD can justify its forward multiple or if it faces a painful valuation compression.
Bullish
- Explosive Data Center Segment Growth: The Data Centers segment generated $296.9 million in revenue, driving a strategic pivot into a high-growth market. This successful diversification underpins the market's reevaluation of Modine's growth profile, moving it beyond its cyclical automotive roots.
- Strong Revenue Growth Trajectory: Q3 FY2026 revenue grew 30.51% year-over-year to $805 million, continuing a multi-quarter climb from $603.5 million in Q4 FY2024. This robust top-line expansion validates the company's growth strategy and market demand for its thermal solutions.
- Significant Analyst Upside & Bullish Sentiment: Analyst consensus implies a price target of ~$302 based on a forward EPS estimate of $10.16 and a forward PE of 29.75, representing ~38% upside from $219.32. Seven analysts maintain bullish 'Buy' and 'Outperform' ratings, reinforcing confidence in the fundamental story.
- Powerful Technical Momentum & Relative Strength: The stock has gained 157.06% over the past year and 55.76% over the past three months, dramatically outperforming the SPY. Its 1-month relative strength of 7.58 indicates sustained buying pressure and market leadership.
Bearish
- Severe Quarterly Profitability Collapse: Q3 FY2026 reported a net loss of -$47.4 million and negative EBITDA of -$9.2 million, a stark reversal from net income of $44.4 million the prior quarter. This raises serious questions about earnings sustainability and cost control amidst growth.
- Extreme Volatility & High Beta Risk: With a beta of 1.679, MOD is ~68% more volatile than the market, amplifying downside risk. The recent price action shows a sharp pullback from $243.80 to $187.29, illustrating the stock's susceptibility to violent corrections.
- Recent Margin Compression & Cash Burn: Q3 gross margin of 23.12% fell below the TTM gross margin of 24.98%, and quarterly free cash flow was negative -$17.1 million. This margin pressure and cash burn challenge the narrative of a smooth transition to higher-margin businesses.
- Valuation Relies on Future Earnings Recovery: A forward PE of 29.75 is high and entirely dependent on a projected earnings rebound from current losses. The wide analyst EPS range ($8.03 to $12.61) reflects substantial uncertainty around this recovery.
MOD Technical Analysis
The stock is in a powerful, sustained uptrend, evidenced by a staggering 157.06% one-year price change. As of the latest close of $219.32, the price is trading near the upper end of its 52-week range, approximately 90% of the distance from the $64.79 low to the $243.80 high, indicating strong momentum but also potential overextension. The short-term momentum is exceptionally strong and accelerating, with a 55.76% gain over the past three months and a 3.30% gain over the past month, significantly outperforming the SPY's returns of -4.0% and -4.28% over the same periods, respectively. Recent momentum shows a sharp acceleration from late January 2026, where the price catapulted from around $146 to above $200 in a matter of weeks, suggesting a major positive catalyst was priced in. This explosive move is followed by a period of consolidation and volatility, with the price pulling back from a peak near $240 in early March to the current level, indicating a digestion phase after the parabolic advance. The stock exhibits high volatility, with a beta of 1.679, meaning it is approximately 68% more volatile than the broader market, which is a critical consideration for risk-adjusted positioning. Key technical support is anchored at the 52-week low of $64.79, though more immediate support lies in the $185-$200 zone where the stock consolidated post-surge. The primary resistance is the 52-week high of $243.80; a decisive breakout above this level would signal a resumption of the primary uptrend. Conversely, a breakdown below the $185 support could indicate a deeper correction is underway. The high beta underscores the stock's sensitivity to market moves, amplifying both upside and downside potential.
Beta
1.68
1.68x market volatility
Max Drawdown
-27.6%
Largest decline past year
52-Week Range
$68-$249
Price range past year
Annual Return
+189.0%
Cumulative gain past year
| Period | MOD Return | S&P 500 |
|---|---|---|
| 1m | +20.0% | +0.4% |
| 3m | +93.0% | -2.0% |
| 6m | +66.3% | +4.1% |
| 1y | +189.0% | +23.9% |
| ytd | +71.5% | -0.3% |
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MOD Fundamental Analysis
Revenue growth has been robust but volatile on a quarterly basis. The most recent quarter (Q3 FY2026) reported revenue of $805 million, representing a substantial 30.51% year-over-year growth. However, this follows a sequential decline from $738.9 million in Q2, indicating potential lumpiness or seasonality. The multi-quarter trend shows revenue climbing from $603.5 million in Q4 FY2024 to the current $805 million, driven in part by the burgeoning Data Centers segment, which contributed $296.9 million, highlighting a successful diversification into a high-growth end-market. Profitability has been inconsistent, with the latest quarter showing a net loss of -$47.4 million and negative EBITDA of -$9.2 million, a sharp reversal from the net income of $44.4 million and EBITDA of $91.7 million in the prior quarter. The gross margin for Q3 was 23.12%, which is below the trailing twelve-month gross margin of 24.98% indicated in the valuation data, suggesting recent margin compression. This quarterly loss appears anomalous against a backdrop of generally positive profitability in preceding quarters, where net income margins ranged from 4.28% to 7.66%. The balance sheet shows moderate leverage with a debt-to-equity ratio of 0.58, and a healthy current ratio of 1.78 indicates sufficient short-term liquidity. Trailing twelve-month free cash flow is a positive $7.4 million, though quarterly free cash flow was negative -$17.1 million in Q3. Return on equity is a strong 20.22%, signaling efficient use of shareholder capital. The company's financial health is adequate to fund its strategic initiatives, though the recent quarterly cash burn and net loss warrant monitoring for sustainability.
Quarterly Revenue
$805000000.0B
2025-12
Revenue YoY Growth
+0.30%
YoY Comparison
Gross Margin
+0.23%
Latest Quarter
Free Cash Flow
$7400000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is MOD Overvalued?
Given the most recent quarterly net income is negative (-$47.4 million), we lead with the Price-to-Sales (PS) ratio for valuation. The trailing PS ratio is 1.56, while the forward PE is 29.75, indicating the market is pricing in a significant recovery and expansion in profitability. The substantial gap between a negative trailing earnings scenario and a forward PE of nearly 30x reflects high growth expectations embedded in the stock price, particularly for the data center business. Comparing Modine's PS ratio of 1.56x to a precise industry average is not available in the provided data, but its EV/Sales multiple of 4.26 offers another lens. A PS ratio below 2x for a company demonstrating 30%+ revenue growth and a strategic shift into data centers could be interpreted as a discount if the market is still valuing it as a traditional auto parts company. The valuation premium is likely being justified by the anticipated growth and margin profile of its new thermal management applications beyond automotive. Historically, Modine's own PS ratio has fluctuated significantly, from a low near 0.82 in early 2022 to a high of 10.59 in late 2024. The current PS of 1.56 sits well below its recent historical peaks, suggesting the stock is not near bubble territory relative to its own history, despite the massive price appreciation. This lower historical PS reading, combined with the transformed business mix, implies the market may be applying a different, potentially more demanding, valuation framework focused on future earnings rather than current sales.
PE
21.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range -37x~368x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks are pronounced, centered on the alarming Q3 profitability collapse. A net loss of -$47.4 million and negative EBITDA of -$9.2 million represent a severe deviation from the profitable trajectory of prior quarters, where net income margins ranged from 4.28% to 7.66%. This raises risks of unsustainable cash burn (quarterly FCF of -$17.1M) and margin compression (Q3 gross margin of 23.12% vs. TTM 24.98%), potentially indicating the high cost of fueling data center growth. While the balance sheet shows moderate leverage (D/E of 0.58) and good liquidity (current ratio 1.78), continued losses would rapidly erode this financial health.
Market & Competitive Risks are elevated due to MOD's premium valuation and high volatility. The forward PE of 29.75 prices in a flawless earnings recovery and expansion, creating significant valuation compression risk if growth stumbles or margins fail to improve. The stock's high beta of 1.679 means it will fall disproportionately in a market downturn. Furthermore, as a new entrant in the competitive data center cooling market, Modine faces execution risk against established players, and any slowdown in data center capex spending would directly impact its primary growth engine.
Worst-Case Scenario involves a failure to restore profitability combined with a broader market sell-off triggering a derating. In this adverse scenario, the stock could re-test its key technical support near $185 and potentially fall towards its 52-week low of $64.79 if the growth narrative fully unravels. A more realistic severe downside, accounting for its transformed business mix, could be a 35-40% decline from the current price, aligning with a move to the $130-$140 range where the stock traded prior to its late-January surge. This would represent a loss of approximately $75-$85 per share for investors buying at current levels.