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Mayville Engineering Company (MEC)
NYSE:MEC
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Mayville Engineering Company
(NYSE:MEC)
65Neutral
Positive Factors
Future Earnings
The coming commercial vehicle volume ramp-up provides strong visibility and support for future earnings estimates.
Margin Performance
The company's strong margin performance and cash generation are notable highlights.
Negative Factors
Revenue Guidance
FY24 guidance was lowered significantly as end market demand continues to soften.
Mayville Engineering Company (MEC) vs. S&P 500 (SPY)
Market Cap
$293.02M
Dividend YieldN/A
Average Volume (3M)98.20K
Price to Earnings (P/E)11.6
Beta (1Y)1.00
Revenue Growth-1.16%
EPS Growth227.49%
CountryUS
Employees2,500
SectorIndustrials
Sector Strength68
IndustryIndustrial Goods
Share Statistics
EPS (TTM)1.24
Shares Outstanding20,419,823
10 Day Avg. Volume185,779
30 Day Avg. Volume98,196
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)0.47
Price to Cash Flow (P/CF)4.00
P/FCF Ratio4.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.00Price Target Upside32.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Mayville Engineering Company Business Overview & Revenue Model
Company DescriptionMayville Engineering Co., Inc. engages in the production of metal components. It offers a broad range of prototyping and tooling, production fabrication, coating, assembly, and aftermarket components. Its customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction, powersports, agriculture, military, and other end markets. The company was founded by Leo Bachhuber and Ted Bachhuber in 1945 and is headquartered in Mayville, WI.
How the Company Makes MoneyMEC generates revenue through its extensive range of metal fabrication and manufacturing services. The company’s primary revenue streams include fabricating components and assemblies for original equipment manufacturers (OEMs) across various industries, including agriculture, construction, and military. MEC partners with OEMs to deliver bespoke products and solutions that meet specific customer needs, often involving custom design and engineering services. Additionally, the company benefits from long-term contracts and relationships with key industry players, which provide a steady stream of income and opportunities for growth.
Mayville Engineering Company Financial Statement Overview
Summary
Mayville Engineering Company (MEC) exhibits strong financial performance with significant improvements in net income and cash flow despite inconsistent revenue growth. Operational efficiency is evident from the improved EBIT margin and strong equity position.Income Statement
Mayville Engineering Company (MEC) has demonstrated a strong improvement in profitability, with a significant increase in net income from $7.84 million in 2023 to $25.97 million in 2024. The company maintained a gross profit margin of 100% in 2024, indicating efficient cost management. Revenue growth has been inconsistent, with a slight decrease in 2024. However, the EBIT margin improved significantly from 3.43% in 2023 to 7.66% in 2024, showcasing operational efficiency gains.75
Positive
Balance Sheet
MEC's balance sheet shows a solid equity position with stockholders' equity rising to $251.75 million in 2024. The debt-to-equity ratio is low at 0.10, indicating low leverage and financial stability. Return on equity (ROE) improved from 3.41% in 2023 to 10.31% in 2024, highlighting enhanced profitability. The equity ratio is robust at 56.50% in 2024, reflecting a strong capital structure and low reliance on debt financing.70
Positive
Cash Flow
MEC's cash flow generation is strong, with operating cash flow more than doubling from $40.36 million in 2023 to $89.81 million in 2024. The free cash flow increased significantly, reflecting effective capital management. The operating cash flow to net income ratio is robust at 3.46, indicating strong cash conversion. Free cash flow to net income ratio is 2.99, suggesting efficient cash utilization.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 581.60M | 588.42M | 539.39M | 454.83M | 357.61M |
| Gross Profit | ||||
| 71.10M | 69.70M | 61.07M | 51.38M | 31.50M |
| EBIT | ||||
| 44.55M | 20.19M | 25.77M | 8.76M | -6.50M |
| EBITDA | ||||
| 44.55M | 55.05M | 25.77M | 24.39M | 25.59M |
| Net Income Common Stockholders | ||||
| 25.97M | 7.84M | 18.73M | -7.45M | -7.09M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 206.00K | 672.00K | 127.00K | 118.00K | 121.00K |
| Total Assets | ||||
| 445.57M | 496.66M | 440.58M | 379.47M | 338.53M |
| Total Debt | ||||
| 25.41M | 182.08M | 108.98M | 68.82M | 47.94M |
| Net Debt | ||||
| 25.21M | 181.41M | 108.86M | 68.70M | 47.82M |
| Total Liabilities | ||||
| 193.82M | 266.68M | 222.71M | 181.20M | 137.68M |
| Stockholders Equity | ||||
| 251.75M | 229.98M | 217.87M | 198.27M | 200.86M |
| Cash Flow | Free Cash Flow | |||
| 77.71M | 23.77M | -6.18M | -24.85M | 28.73M |
| Operating Cash Flow | ||||
| 89.81M | 40.36M | 52.43M | 14.46M | 36.52M |
| Investing Cash Flow | ||||
| -11.71M | -104.13M | -50.67M | -33.96M | -5.77M |
| Financing Cash Flow | ||||
| -78.56M | 64.31M | -1.75M | 19.50M | -30.63M |
Mayville Engineering Company Technical Analysis
Negative
14.35
Price Trends
15.28
Negative
16.52
Negative
17.46
Negative
Market Momentum
-0.35
Negative
43.05
Neutral
55.62
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 14.35 is below the 20-day moving average (MA) of 14.72, below the 50-day MA of 15.28, and below the 200-day MA of 17.46, indicating a bearish trend. The MACD of -0.35 indicates Negative momentum. The RSI at 43.05 is Neutral, neither overbought nor oversold. The STOCH value of 55.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEC.
Mayville Engineering Company Risk Analysis
Mayville Engineering Company disclosed 35 risk factors in its most recent earnings report. Mayville Engineering Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mayville Engineering Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $2.88B | 20.27 | 12.73% | 1.84% | 7.14% | -4.01% | |
67 Neutral | $835.77M | 189.59 | 0.67% | 1.46% | -2.47% | -87.25% | |
65 Neutral | $293.02M | 11.62 | 10.78% | ― | -1.16% | 227.49% | |
65 Neutral | $1.65B | 17.27 | 7.67% | 3.81% | -2.46% | -19.05% | |
61 Neutral | $8.22B | 13.01 | 0.73% | 3.10% | 3.88% | -16.90% | |
56 Neutral | $632.00M | 18.52 | 9.83% | 5.10% | -1.29% | 43.54% | |
53 Neutral | $519.49M | ― | -1.15% | ― | 1.32% | -104.92% |
* Industrials Sector Average
Performance Comparison
MEC
Mayville Engineering Company
14.35
1.26
9.63%
ASTE
Astec
36.65
-2.77
-7.03%
KMT
Kennametal
21.36
-1.32
-5.82%
NPK
National Presto
89.01
13.85
18.43%
PATK
Patrick Industries
85.70
11.24
15.10%
TWI
Titan International
8.22
-4.18
-33.71%
Mayville Engineering Company Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: 4.06% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging fiscal environment with significant revenue and margin declines in 2024 due to weaker demand across core markets. However, the company achieved strong free cash flow and continued debt reduction, alongside new business wins and a committed share repurchase program, indicating resilience and strategic focus on long-term growth.Highlights
Strong Free Cash Flow Generation
In 2024, Mayville Engineering Company generated free cash flow of nearly $78 million, including $25.5 million from a legal settlement. Organic free cash flow more than doubled versus 2023 levels.
Debt Reduction Achievements
During the fourth quarter, the company repaid more than $31 million in debt, reducing net leverage to 1.3 times by year-end, below the targeted range of 1.5 to 2 times.
Share Repurchase Program
In 2024, the company repurchased $5.9 million of common stock with $19 million remaining under the existing $25 million authorization, indicating ongoing commitment to shareholder value.
New Business Wins
In 2024, the company booked over $100 million in new business wins, a 12% increase year-over-year, demonstrating effective market expansion efforts.
Lowlights
Revenue Decline
The fourth quarter saw an 18% year-over-year decline in revenue due to lower customer program activity and softer demand across core markets.
Decreased Manufacturing Margin
Manufacturing margin decreased to $10.8 million from $18.2 million in the prior year, with the manufacturing margin rate dropping from 12.3% to 8.9%.
End Market Challenges
Significant declines were observed in key markets: Powersports (-29.1%), Construction and Access (-34.5%), and Agriculture (-46.5%) year-over-year in the fourth quarter.
Adjusted EBITDA Decline
Adjusted EBITDA for the fourth quarter was $9.2 million, compared to $17.7 million in the prior year, with a margin decrease of 430 basis points to 7.6%.
Company Guidance
In the Mayville Engineering Company's fourth quarter 2024 earnings call, significant guidance was provided concerning the company's financial and operational strategies. The company reported an 18% year-over-year revenue decline largely due to softer demand and channel inventory normalization efforts among OEM customers. Despite these challenges, Mayville generated nearly $78 million in free cash flow for the year, boosted by a $25.5 million legal settlement, and repaid over $31 million in debt, lowering the net leverage to 1.3 times adjusted EBITDA. The guidance for 2025 anticipates net sales between $560 million and $590 million, with adjusted EBITDA ranging from $60 million to $66 million, reflecting a gradual recovery expected in the second half of the year. The company also highlighted the potential for demand improvements stemming from new business ventures in less cyclical end markets, and it remains committed to capital allocation strategies, including further debt reduction and share repurchases under their $25 million authorization. Additionally, Mayville plans to capitalize on M&A opportunities within high-growth adjacent markets to drive long-term value creation.Mayville Engineering Company Corporate Events
Executive/Board Changes
Mayville Engineering Appoints Craig Nichols as SVP
Neutral
Mar 11, 2025
On March 10, 2025, Mayville Engineering Company announced the appointment of Craig D. Nichols as Senior Vice President Operations and Supply Chain. Nichols brings extensive experience from his previous roles at Dana Incorporated and Jason Industries. His compensation package includes a base salary, bonus eligibility, and participation in various company plans. Additionally, Nichols has entered into severance and change in control agreements, which outline his entitlements and obligations in the event of employment termination or company control changes.
Executive/Board ChangesShareholder Meetings
Mayville Engineering Announces Director Retirement in 2025
Neutral
Feb 24, 2025
On February 20, 2025, Allen J. Carlson, a director of Mayville Engineering Company, Inc., announced his intention to retire from the Board of Directors following the annual meeting of shareholders on April 22, 2025. Mr. Carlson’s decision to retire is not due to any disagreements with the company’s operations, policies, or practices.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.