Modine Manufacturing Company (MOD) | Investment Case

1. Company Snapshot

1.a. Company Description

Modine Manufacturing Company provides engineered heat transfer systems and heat transfer components for use in on- and off-highway original equipment manufacturer (OEM) vehicular applications.It operates through Climate Solutions and Performance Technologies segments.The company offers gas-fired, hydronic, electric, and oil-fired unit heaters; indoor and outdoor duct furnaces; infrared units; perimeter heating products, such as commercial fin-tube radiation, cabinet unit heaters, and convectors; roof-mounted direct- and indirect-fired makeup air units; unit ventilators; single packaged vertical units; precision air conditioning units for data center applications; air handler units; fan walls; chillers; ceiling cassettes; hybrid fan coils; and condensers and condensing units.

It also provides microchannel, heat recovery, round tube plate fin, and motor and generator cooling coils; evaporator unit, fluid, transformer oil, gas, air blast, and dry and brine coolers, as well as remote condensers; and coatings to protect against corrosion.In addition, the company offers powertrain cooling products, including engine cooling modules, radiators, charge air coolers, condensers, oil coolers, fan shrouds, and surge tanks; on-engine cooling products comprising exhaust gas recirculation, engine oil, fuel, charge air, and intake air coolers; auxiliary cooling products, such as transmission and retarder oil coolers, and power steering coolers; and complete battery thermal management systems and electronics cooling packages.It serves heating, ventilation, and cooling OEMs; construction architects and contractors; wholesalers of heating equipment; automobile, truck, bus, and specialty vehicle OEMs; agricultural, industrial, and construction equipment OEMs; and commercial and industrial equipment OEMs. The company has operations in North America, South America, Europe, and Asia.

Modine Manufacturing Company was incorporated in 1916 and is headquartered in Racine, Wisconsin.

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1.b. Last Insights on MOD

Modine Manufacturing's recent performance was driven by strong growth prospects in its data center cooling business, with projected revenues of ~$2B by FY2028, representing a 3-year CAGR of +44.4%. The company's onshoring efforts and expanded capacity have delivered high-growth, profitable prospects. Additionally, Modine's new manufacturing facility in Franklin, Wisconsin, will increase its data center cooling capacity. Analysts have waxed bullish on the stock, considering it a buy at current levels. Panoramic Capital also increased its stake in MOD by 26,547 shares.

1.c. Company Highlights

Last Price	164.54
Change Percentage	2.90%
Open	158.03
Previous Close	159.91
Market Cap ( Millions)	8661
Volume	466186
Year High	166.94
Year Low	64.79
M A 50	150.39
M A 200	114.91

FCF Yield	0.80%
Dividend Yield	0.00%
ROE	19.44%
Debt / Equity	55.25%
Net Debt / EBIDTA	141.04%
Price To Book	8.22
Price Earnings Ratio	46.5
Price To FCF	124.98
Price To sales	3.22
EV / EBITDA	25.89

2. Modine's Earnings Report: A Closer Look

Modine's revenue grew 12% to $633 million, driven by a of 24% in Climate Solutions, primarily due to a 42% increase in data center sales. The gross margin declined 290 basis points to 22.3%. Adjusted EBITDA margin was 14%, with a 4% improvement from the prior year. Earnings per share (EPS) came in at $1.06, beating estimates of $0.97.

Publication Date: Oct -31

                                    📋 Highlights
                                    Climate Solutions Revenue Growth:
                                                24% increase driven by 3 acquisitions, with data center sales up 42% ($67M).
Data Center Expansion:
                                                New facilities in Grenada, Mississippi, and Grand Prairie, Texas, with 5 chiller lines expected by FY27.
Margin Contraction:
                                                Q2 Climate Solutions EBITDA down 4% due to $10-12M in data center expansion costs and $125 bps from heat pump settlements.
Performance Technologies Efficiency:
                                                90 bps EBITDA margin improvement to 14.7% and $7M SG&A reduction via cost-cutting.
Free Cash Flow Outlook:
                                                2.5-3% of sales in FY26 (vs. prior year), with full-year data center revenue targeting >60% growth toward $2B by FY28.

                                

Segment Performance

Climate Solutions delivered a strong performance, with revenue growth driven by data center sales, which grew $67 million or 42%. HVAC Technologies increased $17 million or 25%, driven by inorganic sales from recent acquisitions. Performance Technologies revenue declined by 4% from the prior year, but adjusted EBITDA improved 3% from the prior year, and the adjusted EBITDA margin increased by 90 basis points to 14.7%.

Guidance and Outlook

Modine raised its revenue outlook for fiscal '26, expecting total company sales to grow in the range of 15% to 20%. For Climate Solutions, the company is raising its outlook for the full year sales to grow of 35% to 40% with data center sales expected to grow in of 60% this year. The company expects to generate free cash flow in the second half of the year, but lower as a percentage of sales compared to the prior year.

Valuation Metrics

Modine's P/E Ratio stands at 44.09, indicating a relatively high valuation. The P/S Ratio is 2.99, and the EV/EBITDA is 24.17. The company's ROE is 19.49%, and the Net Debt / EBITDA is 1.41. The Free Cash Flow Yield is 0.86%. These metrics suggest that the market has high expectations for Modine's future performance.

Management's Insights

According to Neil Brinker, the company is seeing growing demand in Europe and the expanding its capabilities, with a priority on the United States. As stated by Neil 'I currently see a path to deliver more than 60% revenue growth in data center this year on our way to achieve over $2 billion in revenues in fiscal 2028.'

3. NewsRoom

Modine Manufacturing Company $MOD Stock Holdings Increased by Cetera Investment Advisers

Dec -02

Source: defenseworld.net

APTV vs. MOD: Which Stock Is the Better Value Option?

Dec -01

Source: zacks.com

Boston Partners Acquires Shares of 200,833 Modine Manufacturing Company $MOD

Nov -29

Source: defenseworld.net

Wasatch Global Opportunities Fund Q3 2025 Contributors And Detractors

Nov -27

Source: seekingalpha.com

Why Modine Manufacturing Stock Was Motoring Higher This Week

Nov -21

Source: fool.com

Artisan Global Discovery Fund: Q3 Delivers Strong Results Amid Trimming And Exits

Nov -20

Source: seekingalpha.com

Airedale by Modine Announces Stainless Steel Extension of TurboChill™ DCS Chiller for Liquid Cooling Data Centers

Nov -18

Source: prnewswire.com

Modine Expands Data Center Cooling Capacity with Opening of New Facility in Franklin, Wisconsin

Nov -17

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.94%)

6. Segments

Performance Technologies

Expected Growth: 7.5%

Modine's Performance Technologies segment growth of 7.5% is driven by increasing demand for electric vehicles, rising adoption of advanced engine cooling systems, and growing need for thermal management solutions in data centers and 5G infrastructure. Additionally, the company's strategic acquisitions and investments in new product development have expanded its market share and improved operational efficiency.

Climate Solutions

Expected Growth: 8.5%

Modine Manufacturing Company's Climate Solutions segment growth of 8.5% is driven by increasing demand for electric vehicle (EV) thermal management systems, growing adoption of heat pump technology in HVAC systems, and rising sales of data center cooling solutions. Additionally, the company's focus on sustainable and energy-efficient products, as well as its expanding presence in the renewable energy market, contribute to its growth momentum.

7. Detailed Products

Heat Exchangers

Modine's heat exchangers are designed to provide efficient heat transfer in a variety of applications, including HVAC, refrigeration, and industrial processes.

Radiators

Modine's radiators are designed to provide efficient heat transfer in a variety of applications, including automotive, industrial, and HVAC.

Coils

Modine's coils are designed to provide efficient heat transfer in a variety of applications, including HVAC, refrigeration, and industrial processes.

Finned Tube Heat Exchangers

Modine's finned tube heat exchangers are designed to provide efficient heat transfer in a variety of applications, including HVAC, refrigeration, and industrial processes.

Oil Coolers

Modine's oil coolers are designed to provide efficient cooling of oil in a variety of applications, including automotive, industrial, and HVAC.

Charge Air Coolers

Modine's charge air coolers are designed to provide efficient cooling of air in a variety of applications, including automotive and industrial.

8. Modine Manufacturing Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Modine Manufacturing Company faces moderate threat from substitutes due to the availability of alternative products in the market.

Bargaining Power Of Customers

Modine Manufacturing Company has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Modine Manufacturing Company relies on a few key suppliers for raw materials, giving them moderate bargaining power.

Threat Of New Entrants

The automotive industry is highly competitive, and new entrants can easily enter the market, posing a high threat to Modine Manufacturing Company.

Intensity Of Rivalry

The automotive industry is highly competitive, with many established players, leading to a high intensity of rivalry among companies like Modine Manufacturing Company.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	37.31%
Debt Cost	6.22%
Equity Weight	62.69%
Equity Cost	15.32%
WACC	11.92%
Leverage	59.52%

11. Quality Control: Modine Manufacturing Company passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Visteon

A-Score: 6.1/10

Value: 7.6

Growth: 7.3

Quality: 7.1

Yield: 0.0

Momentum: 8.0

Volatility: 6.7

1-Year Total Return ->

Lear

A-Score: 5.6/10

Value: 7.9

Growth: 5.1

Quality: 4.1

Yield: 5.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

Dorman Products

A-Score: 5.6/10

Value: 3.7

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

LKQ

A-Score: 5.4/10

Value: 7.4

Growth: 5.4

Quality: 4.9

Yield: 6.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

BorgWarner

A-Score: 5.2/10

Value: 5.3

Growth: 3.7

Quality: 4.5

Yield: 2.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Modine

A-Score: 3.9/10

Value: 1.3

Growth: 7.7

Quality: 5.5

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

33.33%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

11.92%

Modine Manufacturing Company - US6078281002

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MOD

1.c. Company Highlights

Expensive

Strong Momentum

Average Yield

Earnings Miss

Earnings Beats

Medium Volatility

Revenues Beats

More Volatile

Revenues Miss

Stable Momentum

Higher Growth

Average Quality

2. Modine's Earnings Report: A Closer Look

Segment Performance

Guidance and Outlook

Valuation Metrics

Management's Insights

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.94%)

6. Segments

Performance Technologies

Expected Growth: 7.5%

Climate Solutions

Expected Growth: 8.5%

7. Detailed Products

Heat Exchangers

Radiators

Coils

Finned Tube Heat Exchangers

Oil Coolers

Charge Air Coolers

8. Modine Manufacturing Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Modine Manufacturing Company passed 7 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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

164.26$

Current Price

164.26$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA