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Mayville Engineering Company (MEC)
NYSE:MEC
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Mayville Engineering Company
(NYSE:MEC)
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Rating:63Neutral
Price Target:
$16.00
▼(-3.73% Downside)
MEC's overall score reflects stable financial health and growth potential from strategic acquisitions. However, operational challenges, high valuation, and legacy market weaknesses weigh on the score. The reaffirmation of guidance and potential in new markets are positive, but increased debt and cash flow issues are concerns.
Positive Factors
Accu-Fab Acquisition
The Accu-Fab acquisition expands MEC's market opportunities, particularly in data center and critical power sectors, enhancing revenue potential.
Data Center Market Growth
Growth in the data center market offers a new revenue stream, diversifying MEC's portfolio and reducing reliance on legacy markets.
Construction & Access Market Growth
Strong growth in the Construction & Access market indicates robust demand and supports revenue stability amidst challenges in other sectors.
Negative Factors
Legacy Market Challenges
Declining sales in legacy markets like commercial vehicles pose a risk to MEC's revenue stability, necessitating strategic adjustments.
Free Cash Flow Decline
Negative free cash flow impacts MEC's ability to invest in growth and manage debt, potentially affecting long-term financial health.
Increased Net Debt
Rising net debt levels increase financial risk and limit MEC's flexibility to navigate market fluctuations and invest in new opportunities.
Mayville Engineering Company (MEC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$328.95M
Dividend YieldN/A
Average Volume (3M)286.21K
Price to Earnings (P/E)28.2
Beta (1Y)0.72
Revenue Growth-12.38%
EPS Growth-0.71%
CountryUS
Employees2,200
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.10
Shares Outstanding20,318,370
10 Day Avg. Volume198,591
30 Day Avg. Volume286,207
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)1.29
Price to Sales (P/S)0.56
P/FCF Ratio4.17
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue0.99
Enterprise Value/Gross Profit10.08
Enterprise Value/Ebitda8.23
Forecast
1Y Price Target
$19.50Price Target Upside17.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.11
Revenue Forecast (FY)$543.66M
Mayville Engineering Company Business Overview & Revenue Model
Company DescriptionMayville 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 MoneyMEC 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 Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 03, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress with the Accu-Fab acquisition and strong growth potential in the data center and critical power market. However, challenges persist in legacy markets, particularly in commercial vehicles and agriculture, contributing to a decline in manufacturing margins and increased debt leverage. Despite these challenges, the company remains optimistic about future growth and reaffirmed its 2025 guidance.Q3-2025 Updates
Positive Updates
Accu-Fab Acquisition Integration
Significant progress in integrating the Accu-Fab acquisition, with the sales team engaging with Accu-Fab's customer base. The integration offers a scalable solution for data center and critical power OEMs, leading to a substantial pipeline of over $100 million in opportunities.
Data Center and Critical Power Market Growth
The data center and critical power market is expected to represent 20% to 25% of total revenues in the coming years. Revenue synergy expectations from Accu-Fab have increased to between $20 million and $30 million in 2026, with gross margins approximately 10 percentage points higher than the historical average of 15% to 20%.
Construction & Access Market Growth
Construction & Access market revenues increased 10.1% year-over-year during the quarter, supported by the Accu-Fab acquisition and strong nonresidential activity. Organic net sales growth in this market was 6.2% in the quarter.
Powersports Market Growth
Net sales in the powersports market grew 6.4% year-over-year, driven by transient aluminum-related demand.
New Project Awards
During the third quarter, MEC secured $30 million in new project awards with data center and critical power customers. Year-to-date, total awards across legacy markets reached $90 million, nearing the full-year target of $100 million.
Total Sales and Guidance Reaffirmation
Total sales for the third quarter increased 6.6% year-over-year to $144.3 million. MEC reaffirmed its 2025 financial guidance with expected net sales between $528 million and $562 million.
Negative Updates
Legacy End Markets Softness
Legacy end markets remain in a cyclical trough with commercial vehicle demand softening, resulting in a 24% decline in net sales to this end market compared to the prior year period.
Agriculture Market Decline
Agriculture net sales declined 21.8% amid elevated interest rates and lower farm income.
Manufacturing Margin Decline
The manufacturing margin rate decreased to 11% for the third quarter of 2025 compared to 12.6% in the prior year period, primarily due to nonrecurring restructuring costs and lower customer demand in legacy markets.
Interest Expense Increase
Interest expense was $3.4 million for the third quarter of 2025, up from $2.7 million in the prior year period, driven by higher borrowings from the Accu-Fab acquisition.
Free Cash Flow Impact
Free cash flow during the third quarter of 2025 was a negative $1.1 million, reflecting $3.5 million of nonrecurring costs, compared to a positive $15.1 million in the prior year period.
Increased Net Debt
Net debt increased to $214.9 million, up from $114.1 million at the end of the third quarter of 2024, resulting in a net leverage ratio of 3.5x.
Company Guidance
During the Mayville Engineering Company (MEC) Third Quarter 2025 Earnings Conference Call, the company reaffirmed its full-year 2025 financial guidance despite challenges in legacy end markets. MEC expects net sales between $528 million and $562 million, adjusted EBITDA of $49 million to $55 million, and free cash flow of $25 million to $31 million. The integration of Accu-Fab has significantly expanded MEC's market opportunities, with $100 million in qualified opportunities in the data center and critical power sectors. Revenue synergy expectations from Accu-Fab are projected to be between $20 million and $30 million in 2026, with gross margins approximately 10 percentage points above the historical average of 15%-20%. Meanwhile, the commercial vehicle market saw a 24% decline in net sales year-over-year, while the Construction & Access market experienced a 10.1% increase. MEC's third-quarter sales increased by 6.6% to $144.3 million, although organic net sales fell by 9.1%. The company aims to use positive free cash flow in the fourth quarter to reduce debt, with a target to achieve a net leverage ratio of 3x or lower by the end of 2026.Mayville Engineering Company Financial Statement Overview
Summary
MEC shows stable financial health with a strong balance sheet, but faces challenges with declining free cash flow and lower profit margins. The company needs to improve cash generation and profitability.Income Statement
The company shows a modest gross profit margin of 9.5% TTM, indicating some efficiency in production. However, the net profit margin is relatively low at 2.3% TTM, suggesting limited profitability. Revenue growth is positive at 1.7% TTM, but lower than previous years, indicating a slowdown. EBIT and EBITDA margins have decreased compared to the previous year, reflecting potential operational challenges.65
Positive
Balance Sheet
The debt-to-equity ratio has improved significantly to 0.11 TTM, indicating reduced leverage and a stronger equity position. Return on equity is moderate at 7.2% TTM, showing decent profitability relative to shareholder equity. The equity ratio is stable, suggesting a balanced asset structure.72
Positive
Cash Flow
Free cash flow has declined by 23.6% TTM, raising concerns about cash generation. The operating cash flow to net income ratio is healthy at 0.81, indicating good cash conversion. However, the free cash flow to net income ratio is slightly lower at 0.83, suggesting some pressure on free cash flow.58
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 533.52M | 581.60M | 588.42M | 539.39M | 454.83M | 357.61M |
| Gross Profit | 52.55M | 71.10M | 69.70M | 61.07M | 51.38M | 31.50M |
| EBITDA | 64.43M | 82.14M | 55.05M | 55.09M | 24.39M | 25.59M |
| Net Income | 12.22M | 25.97M | 7.84M | 18.73M | -7.45M | -7.09M |
Balance Sheet | ||||||
| Total Assets | 585.58M | 445.57M | 496.66M | 440.58M | 379.47M | 338.53M |
| Cash, Cash Equivalents and Short-Term Investments | 1.22M | 206.00K | 672.00K | 127.00K | 118.00K | 121.00K |
| Total Debt | 250.15M | 110.05M | 181.16M | 108.98M | 67.61M | 47.94M |
| Total Liabilities | 340.81M | 193.82M | 266.68M | 222.71M | 181.20M | 137.68M |
| Stockholders Equity | 244.77M | 251.75M | 229.98M | 217.87M | 198.27M | 200.86M |
Cash Flow | ||||||
| Free Cash Flow | 52.37M | 77.71M | 23.77M | -6.18M | -24.85M | 28.73M |
| Operating Cash Flow | 63.14M | 89.81M | 40.36M | 52.43M | 14.46M | 36.52M |
| Investing Cash Flow | -150.54M | -11.71M | -104.13M | -50.67M | -33.96M | -5.77M |
| Financing Cash Flow | 88.44M | -78.56M | 64.31M | -1.75M | 19.50M | -30.63M |
Mayville Engineering Company Technical Analysis
Positive
16.62
Price Trends
15.22
Positive
15.10
Positive
14.80
Positive
Market Momentum
0.23
Positive
51.47
Neutral
69.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEC, the sentiment is Positive. The current price of 16.62 is above the 20-day moving average (MA) of 16.30, above the 50-day MA of 15.22, and above the 200-day MA of 14.80, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 51.47 is Neutral, neither overbought nor oversold. The STOCH value of 69.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $558.61M | 15.81 | 9.78% | ― | 7.61% | 25.35% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $328.95M | 28.18 | 5.06% | ― | -12.38% | -0.71% | |
62 Neutral | $189.74M | 21.66 | 9.95% | ― | 0.26% | -48.11% | |
54 Neutral | $276.84M | 24.06 | 1.26% | ― | -3.42% | ― | |
51 Neutral | $41.45M | -8.12 | -8.73% | ― | 0.20% | 88.39% | |
41 Neutral | $45.48M | -23.34 | -5.10% | ― | 1.15% | 94.58% |
* Industrials Sector Average
MEC
Mayville Engineering Company
16.19
-0.82
-4.82%
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TPCS
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Mayville Engineering Company Corporate Events
Mayville Engineering Reports Q3 2025 Results Amid Strategic Shifts
Nov 6, 2025
Mayville Engineering Company (MEC) is a U.S.-based, vertically-integrated manufacturing partner offering comprehensive solutions from design to production, serving diverse markets such as commercial vehicles, construction, powersports, and data centers.
Mayville Engineering Highlights Growth Amid Challenges in Earnings Call
Nov 6, 2025
During the recent earnings call, Mayville Engineering Company (MEC) expressed a mixed sentiment, highlighting both significant achievements and ongoing challenges. The company showcased its progress with the Accu-Fab acquisition and its promising growth prospects in the data center and critical power market. However, it also acknowledged the hurdles faced in its legacy markets, such as commercial vehicles and agriculture, which have led to a decline in manufacturing margins and increased debt leverage. Despite these obstacles, MEC remains optimistic about future growth and has reaffirmed its 2025 guidance.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.