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1. Company Snapshot

1.a. Company Description

Mayville Engineering Company, Inc., together with its subsidiaries, operates as a contract manufacturer that serves the heavy and medium duty commercial vehicle, construction and access equipment, powersports, agriculture, military, and other end markets in the United States.The company provides a range of prototyping and tooling, production fabrication, coating, assembly, and aftermarket components.It also supplies engineered components to original equipment manufacturers.


The company was founded in 1945 and is headquartered in Mayville, Wisconsin.

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1.b. Last Insights on MEC

Mayville Engineering's recent performance was driven by strategic growth initiatives, including a major acquisition of Accu-Fab, which brings high-margin EBITDA and offsets weakness in its legacy business. Despite short-term headwinds from soft end-market demand and high interest rates, management's efforts to boost long-term prospects remain intact. The company's Q2 earnings met estimates, with quarterly earnings of $0.1 per share. A "Strong Buy" rating from a recent analysis suggests confidence in the company's undervalued position compared to peers.

1.c. Company Highlights

2. Mayville Engineering Company Delivers Mixed Q3 2025 Results

Mayville Engineering Company reported total sales of $144.3 million for the third quarter of 2025, representing a 6.6% year-over-year increase. However, the company's manufacturing margin rate declined to 11% from 12.6% in the prior year period. The earnings per share (EPS) came in at $0.1, beating analyst estimates of $0.05. The company's financial performance was impacted by persistent demand challenges across its legacy end markets, despite showing signs of growth in the data center and critical power segment.

Publication Date: Nov -25

📋 Highlights
  • Sales Growth:: Q3 2025 sales rose 6.6% YoY to $144.3 million.
  • Accu-Fab Synergies:: $100M+ in qualified data center opportunities, with $20M–$30M revenue synergy expected in 2026.
  • Margin Performance:: Manufacturing margin rate at 11% (vs. 12.6% prior year), despite improved decremental efficiency (30% reduction in Q3).
  • Data Center Market:: Projected to contribute 20% of 2026 sales, driven by $20M+ in new program wins and expanded customer base.
  • Capital Allocation:: 2026 CapEx guidance at $15M–$20M, prioritizing lean investments for data center scaling over legacy markets.

Revenue Growth Drivers

The acquisition of Accu-Fab, which closed at the beginning of the third quarter, has been a significant driver of growth for Mayville Engineering Company. The integration of Accu-Fab has expanded the company's product offerings and capabilities, particularly in the data center and critical power end market. The company's sales team has been actively engaging with Accu-Fab's customer base, leveraging MEC's domestic manufacturing footprint to position the company as a preferred partner for leading data center and critical power OEMs.

Data Center and Critical Power End Market

The data center and critical power end market is expected to be a significant growth driver for Mayville Engineering Company in 2026. The company anticipates that this segment will account for at least 20% of its overall sales in 2026, with 3% of that being legacy MEC products. The company's pipeline of qualified opportunities in this market has grown substantially, with over $100 million in qualified opportunities being bid on. As Jagadeesh Reddy, President and CEO, noted, "We have been extremely busy and active in not only bringing our new customers to Accu-Fab, but also a lot of new customers to legacy MEC locations."

Valuation Metrics

Mayville Engineering Company's current valuation metrics suggest that the market is pricing in moderate growth expectations. The company's P/S Ratio is 0.61, and the EV/EBITDA ratio is 16.45. The ROE is 4.92%, indicating a relatively low return on equity. Analysts estimate revenue growth at 9.7% for next year, which is slightly higher than the current valuation multiples. The stock's P/E Ratio is 26.93, which may indicate that the market is pricing in some level of earnings growth.

Outlook

Mayville Engineering Company is reaffirming its 2025 financial guidance, with expected net sales between $528 million and $562 million. The company expects to outperform its end markets in 2026, driven by new program starts in CV, ag, construction, and military. The company's CapEx is expected to be in the $15 million to $20 million range next year, with a focus on investing in machinery to produce products more efficiently.

3. NewsRoom

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Mayville Engineering's Surge Has Been Well Justified

Nov -23

Source: seekingalpha.com

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Mayville Engineering Company, Inc. (MEC) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Mayville Engineering (MEC) Tops Q3 Earnings and Revenue Estimates

Nov -05

Source: zacks.com

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Mayville Engineering (MEC) to Release Earnings on Tuesday

Nov -02

Source: defenseworld.net

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Aptera Motors Transitions to Public Benefit Corporation, Adds Industry Veterans to Board

Oct -22

Source: globenewswire.com

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Mayville Engineering Company: A Strong Prospect Even In Light Of Recent Pain

Aug -12

Source: seekingalpha.com

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Mayville Engineering Company, Inc. (MEC) Q2 2025 Earnings Call Transcript

Aug -07

Source: seekingalpha.com

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Mayville Engineering (MEC) Q2 Earnings Meet Estimates

Aug -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.51%)

6. Segments

Fabrication

Expected Growth: 2.5%

Mayville Engineering's 2.5% growth in fabrication is driven by increasing demand for precision metal components in the aerospace and defense industries, coupled with the company's strategic investments in advanced manufacturing technologies and process efficiencies. Additionally, growing customer relationships and a strong backlog of orders contribute to this growth.

Performance Structures

Expected Growth: 2.8%

Mayville Engineering Company's 2.8% growth is driven by increasing demand for precision engineered components, strategic acquisitions, and expansion into new markets. Additionally, operational efficiencies and cost savings initiatives have contributed to the company's improved performance. Strong relationships with key customers and a focus on innovative product development have also supported revenue growth.

Tube

Expected Growth: 2.2%

Mayville Engineering's tube segment growth of 2.2% is driven by increasing demand for heavy-duty trucking and construction equipment, as well as growing adoption of electric vehicles. Additionally, the company's focus on product innovation, cost reduction initiatives, and strategic acquisitions have contributed to its growth momentum.

Tank

Expected Growth: 2.9%

Mayville Engineering's Tank segment growth of 2.9% is driven by increasing demand for heavy machinery in construction and mining industries, coupled with the company's strategic expansion into new geographic markets and product diversification. Additionally, investments in research and development have led to innovative tank designs, enhancing the company's competitive edge.

Intercompany Sales Elimination

Expected Growth: 0.5%

Mayville Engineering Company, Inc.'s 0.5% intercompany sales elimination growth is driven by increased vertical integration, improved supply chain management, and reduced transfer pricing. This rational is supported by the company's efforts to optimize its production process, minimize costs, and enhance operational efficiency.

Outdoor Sports

Expected Growth: 3.5%

The 3.5% growth in Outdoor Sports from Mayville Engineering Company, Inc. is driven by increasing consumer participation in outdoor activities, rising demand for eco-friendly and sustainable products, and innovative product developments in camping, hiking, and cycling gear. Additionally, strategic partnerships and expanding distribution channels contribute to the segment's growth.

7. Detailed Products

Fabrication

Custom metal fabrication services for a wide range of industries, including agriculture, construction, and industrial equipment.

Coatings

Specialized coating services, including e-coat, powder coat, and liquid paint, to protect and enhance the durability of metal products.

Assembly

Complete assembly services, including mechanical, hydraulic, and electrical assembly, for complex products and systems.

Prototyping

Rapid prototyping services to quickly and cost-effectively develop and test new product designs.

Testing and Inspection

Comprehensive testing and inspection services to ensure the quality and reliability of products.

Supply Chain Management

End-to-end supply chain management services to optimize logistics, inventory management, and distribution.

8. Mayville Engineering Company, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is moderate due to the availability of alternative engineering services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of large and established clients who can negotiate prices and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is moderate due to the moderate barriers to entry and the availability of resources and technology.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors and the need to differentiate the company's services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.95%
Debt Cost 6.90%
Equity Weight 60.05%
Equity Cost 8.10%
WACC 7.62%
Leverage 66.53%

11. Quality Control: Mayville Engineering Company, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 4.3

Quality: 6.2

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Momentum: 8.5

Volatility: 5.3

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Quality: 5.6

Yield: 1.0

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Volatility: 4.0

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Mayville Engineering Company

A-Score: 4.2/10

Value: 7.1

Growth: 7.4

Quality: 5.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

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A-Score: 3.8/10

Value: 5.5

Growth: 1.0

Quality: 2.4

Yield: 2.0

Momentum: 6.5

Volatility: 5.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.63$

Current Price

17.63$

Potential

-0.00%

Expected Cash-Flows