Mayville Engineering Company (MEC) AI Stock Analysis

• Market Cap: $389.71M
• Dividend Yield: N/A
• Average Volume (3M): 209.75K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.73
• Revenue Growth: -12.38%
• EPS Growth: -0.71%
• Country: US
• Employees: 2,200
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): -0.08
• Shares Outstanding: 20,318,370
• 10 Day Avg. Volume: 208,508
• 30 Day Avg. Volume: 209,749
• PEG Ratio: 0.36
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 0.70
• P/FCF Ratio: 14.24
• Enterprise Value/Market Cap: 1.61
• Enterprise Value/Revenue: 1.15
• Enterprise Value/Gross Profit: 13.89
• Enterprise Value/Ebitda: 14.53
• 1Y Price Target: $27.33
• Price Target Upside: 42.49% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.09
• Revenue Forecast (FY): $598.14M

• Rating: 58 Neutral
• Price Target: $20.50 ▲(6.88% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by a mixed financial profile: a strengthened, low-leverage balance sheet and still-positive operating/free cash flow are offset by the sharp profitability deterioration in 2025 and earnings volatility. The earnings call adds moderate support via explicit 2026 growth/FCF guidance and a sizable data center pipeline, but near-term margin pressure and high leverage temper confidence. Technicals are neutral-to-cautious, and valuation is weak on traditional metrics due to negative earnings and no stated dividend yield.

Positive Factors

Conservative balance sheet

The material reduction in leverage to debt-to-equity ~0.11 provides durable financial flexibility to fund capex, support program ramps, and absorb cyclical demand swings. A stronger capital base lowers refinancing risk, improves lender confidence, and enables strategic investments over the next several quarters.

Positive cash generation

Generating positive operating and free cash flow even during a net loss indicates underlying cash resilience from working-capital management and non-cash charges. This enduring cash generation supports deleveraging, funds incremental working capital for program ramps, and underpins sustainable reinvestment and operations.

Large data-center pipeline and 2026 guidance

A >$125M pipeline and $40–50M of near-term launches create a structural growth runway in the high‑value data center/critical power market, which management expects to be >20% of 2026 revenue. This provides lasting revenue diversification, higher-margin cross-selling potential, and multi-quarter visibility into backlog-driven growth.

Negative Factors

Earnings volatility and 2025 loss

The swing to a net loss and negative EBITDA margin reflects structural volatility in demand mix and cost absorption, which undermines consistent returns and complicates multi-period planning. Persistent earnings variability can constrain reinvestment, raise effective borrowing costs, and make hitting longer-term targets more challenging.

Elevated net debt and covenant constraints

Higher net debt and 3.7x leverage reduce strategic flexibility and increase interest expense, pressuring margins and free cash flow. Lenders have amended covenants and reduced revolver capacity, which can limit acquisitive growth, force tighter capital allocation, and elevate refinancing and covenant breach risk through the recovery period.

Margin pressure from program launches

Short launch timelines, retooling across plants, and early-stage inefficiencies create recurring margin drag during ramp periods. If program launches and retooling remain frequent, these structural operational inefficiencies could compress manufacturing margins and reduce sustainable free cash flow conversion across multiple quarters.

Mayville Engineering Company Business Overview & Revenue Model

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.

How the Company Makes Money

MEC generates revenue primarily through its contract manufacturing services, which include the production of custom metal components and assemblies for various industries. The company's revenue model is based on long-term contracts with clients in sectors such as transportation, military, and industrial, providing a stable income stream. Key revenue streams include direct sales from manufactured products, services related to engineering and design, and assembly services. Additionally, MEC has established significant partnerships with large corporations in the defense and transportation industries, which contribute to its earnings by providing consistent demand for its manufacturing capabilities. The company's focus on quality and precision, along with its ability to adapt to customer needs, further enhances its market position and revenue potential.

Mayville Engineering Company Financial Statement Overview

Summary

Overall fundamentals are mixed. The balance sheet is a clear positive with conservative leverage (debt-to-equity ~0.11 in 2025), but operating results are volatile with a swing from profitability in 2024 to a net loss in 2025 and negative EBITDA margin. Cash flow stayed positive in 2025 despite the loss, yet free cash flow fell sharply and has been inconsistent over time.

Income Statement

Revenue has been relatively stable over the last several years, but growth has been inconsistent (down slightly in 2024, up modestly in 2025). Profitability deteriorated sharply in 2025, with the company moving from solid profits in 2024 (net margin ~4.5%) to a net loss in 2025 (net margin ~-1.5%) and negative EBITDA margin. Earlier years show mixed performance (losses in 2020–2021, profitability improving through 2022–2024), indicating earnings volatility and weaker consistency than peers with steadier margins.

Balance Sheet

Leverage is conservative in 2025, with debt-to-equity around 0.11 and equity representing a large portion of the capital base. This is a meaningful improvement from 2023–2024 when leverage was higher (notably ~0.79 in 2023 and ~0.44 in 2024). The main weakness is returns: 2025 shows negative return on equity driven by the net loss, and profitability swings have limited the company’s ability to consistently generate attractive returns on its equity base.

Cash Flow

Cash generation remains a relative strength: operating cash flow and free cash flow were positive in 2025 despite a net loss, suggesting non-cash charges and/or working-capital release helped support cash. However, free cash flow fell sharply in 2025 (down ~49% year over year), and cash conversion has been inconsistent across the period (including negative free cash flow in 2021–2022). Overall cash flow quality is decent, but variability and the recent decline reduce confidence versus more stable cash generators.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	546.49M	581.60M	588.42M	539.39M	454.83M
Gross Profit	45.16M	71.10M	69.70M	61.07M	51.38M
EBITDA	43.19M	82.14M	55.05M	55.09M	24.39M
Net Income	-8.11M	25.97M	7.84M	18.73M	-7.45M
Balance Sheet
Total Assets	563.64M	445.57M	496.66M	440.58M	379.47M
Cash, Cash Equivalents and Short-Term Investments	1.50M	206.00K	672.00K	127.00K	118.00K
Total Debt	25.57M	110.05M	181.16M	108.98M	67.61M
Total Liabilities	322.90M	193.82M	266.68M	222.71M	181.20M
Stockholders Equity	240.74M	251.75M	229.98M	217.87M	198.27M
Cash Flow
Free Cash Flow	26.91M	77.71M	23.77M	-6.18M	-24.85M
Operating Cash Flow	38.56M	89.81M	40.36M	52.43M	14.46M
Investing Cash Flow	-151.53M	-11.71M	-104.13M	-50.67M	-33.96M
Financing Cash Flow	114.26M	-78.56M	64.31M	-1.75M	19.50M

Mayville Engineering Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.18
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEC, the sentiment is Negative. The current price of 19.18 is below the 20-day moving average (MA) of 21.11, below the 50-day MA of 19.79, and above the 200-day MA of 16.58, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 41.02 is Neutral, neither overbought nor oversold. The STOCH value of 29.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEC.

Mayville Engineering Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NWPX	74 Outperform	$721.23M	17.25	9.20%	―	7.61%	25.35%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
MEC	58 Neutral	$389.71M	-47.25	-3.30%	―	-12.38%	-0.71%
TG	54 Neutral	$307.21M	9.87	1.26%	―	-3.42%	―
AP	46 Neutral	$167.69M	-5.24	-8.73%	―	0.20%	88.39%
TPCS	42 Neutral	$36.84M	-8.20	-5.10%	―	1.15%	94.58%

Mayville Engineering Company Corporate Events

Mayville Engineering Amends Credit Agreement, Adjusts Leverage Terms

On February 25, 2026, Mayville Engineering Company, Inc. amended its Amended and Restated Credit Agreement, reducing the total commitment on its senior secured revolving facility by $75 million to $275 million and adding higher pricing tiers tied to elevated leverage ratios. The Third Amendment also temporarily relaxes leverage and interest coverage covenants through 2026 while simultaneously tightening certain operational covenants, including limits on permitted acquisitions during the 2026 fiscal year, signaling a shift toward more constrained growth activity but greater covenant flexibility as the company manages its capital structure.

The revised agreement allows higher maximum consolidated total leverage ratios, peaking at 5.25 to 1.00 in the first half of 2026 before stepping back down to 3.50 to 1.00 from March 31, 2027, and lowers the minimum interest coverage ratio floor to 2.75 to 1.00 for the latter half of 2026. These changes suggest lenders are accommodating near-term leverage and earnings dynamics while retaining tighter operational controls, which could affect the company’s acquisition strategy and risk profile but preserves access to significant revolving credit capacity.

The most recent analyst rating on (MEC) stock is a Hold with a $21.00 price target. To see the full list of analyst forecasts on Mayville Engineering Company stock, see the MEC Stock Forecast page.