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Recent acquisitions and a $100M U.S. investment expand Modine's data center cooling capacity.
Shares of Modine Manufacturing Company (MOD - Free Report) have gained significant momentum in the past six months. The thermal management company’s shares have soared 75% over the past six months, outperforming the Zacks Automotive – Original Equipment industry’s growth of 17.1%.
Modine has also outperformed industry peers, including Gentex Corporation (GNTX - Free Report) and PHINIA Inc. (PHIN - Free Report) . Gentex shares have gained 9.5% while PHINIA shares have risen 43.2% over the same period. The rise in the share price of Modine is attributable to year-over-year improvement in the company’s sales performance in the first quarter of fiscal 2026.
Recently, Modine inaugurated a 100,000 sq. ft. facility in Chennai, India, to enhance its capacity and deliver faster, more precise and locally customized solutions for data center customers across the Asia-Pacific region.
6-Month Price Performance Comparison
Image Source: Zacks Investment Research
Factors Stimulating MOD’s Performance
In the first quarter of fiscal 2026, Modine reported net sales of $682.8 million, up 3% from $661.5 million a year earlier. The increase was fueled by strong performance in the Climate Solutions segment, driven by sustained momentum and higher demand for data center products, as well as both organic and acquisition-driven growth in the HVAC Technologies group. Building on its strong first-quarter performance, the company anticipates a substantial volume ramp-up in the second half of the year and projects full-year fiscal 2026 net sales growth of 10-15% year over year. It expects adjusted EBITDA growth of 12-20% year over year.
The company’s 80/20 principles focus on acquiring businesses and investing in technologies to accelerate strategic growth in select markets. In April 2025, Modine acquired AbsolutAire, a manufacturer of direct-fired heating, ventilation and make-up air systems, followed by the acquisition of L.B. White in May 2025, a global leader in specialty heating solutions for the agriculture, construction and special event industries. L.B. White has since been integrated into Modine's HVAC Technologies product group. Both acquisitions support Modine’s strategy to address mission-critical thermal management challenges while expanding into adjacent markets with strong long-term growth potential.
In July, Modine completed the acquisition of Climate by Design International (CDI), a Minnesota-based company known for its desiccant dehumidification systems and specialized process air handlers. CDI adds significant expertise in desiccant-driven dehumidification and is recognized for its engineering excellence. Alongside earlier acquisitions of Napps Technology in 2023 and Scott Springfield in 2024, CDI further broadens Modine’s Commercial IAQ portfolio and opens access to new markets.
The company announced a $100 million investment over 12-18 months to expand U.S. manufacturing of Airedale by Modine data center cooling products. The plan includes a new Dallas facility, expansion in Grenada, MS and potential repurposing of sites in Franklin, WI and Jefferson City, MO. The investment will boost the company’s engineering, testing and product development. With rising demand, Modine expects data center revenues to approach $2 billion by fiscal 2028.
MOD’s Valuation & Estimates
MOD is trading at a forward price-to-sales (P/S) ratio of 2.33, slightly above the industry’s 2.11.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MOD’s fiscal 2026 sales and earnings indicates year-over-year growth of 11.3% and 14.3%, respectively. The Zacks Consensus Estimate for fiscal 2026 and 2027 EPS has moved up 11 cents and 46 cents, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Should You Buy the Stock Now?
Modine expects robust sales and adjusted EBITDA growth in fiscal 2026, supported by a substantial volume ramp-up in the second half. Acquisition of businesses will expand its presence into adjacent markets to underpin strong long-term growth potential. Investment in data center cooling products will help the company serve the rising demand and boost its top-line growth.
Moreover, the company has a return on equity (ROE) of 23.9% compared to the industry’s 7.2%. An ROE above 20% generally reflects very strong financial performance and efficient use of shareholder capital.
Taken together, these factors establish a solid foundation for the company’s long-term performance, suggesting that the present moment may represent an attractive and relatively secure entry point for prospective investors.
Image: Bigstock
Modine Surges 75% in 6 Months: Buy, Sell or Hold the Stock?
Key Takeaways
Shares of Modine Manufacturing Company (MOD - Free Report) have gained significant momentum in the past six months. The thermal management company’s shares have soared 75% over the past six months, outperforming the Zacks Automotive – Original Equipment industry’s growth of 17.1%.
Modine has also outperformed industry peers, including Gentex Corporation (GNTX - Free Report) and PHINIA Inc. (PHIN - Free Report) . Gentex shares have gained 9.5% while PHINIA shares have risen 43.2% over the same period. The rise in the share price of Modine is attributable to year-over-year improvement in the company’s sales performance in the first quarter of fiscal 2026.
Recently, Modine inaugurated a 100,000 sq. ft. facility in Chennai, India, to enhance its capacity and deliver faster, more precise and locally customized solutions for data center customers across the Asia-Pacific region.
6-Month Price Performance Comparison
Image Source: Zacks Investment Research
Factors Stimulating MOD’s Performance
In the first quarter of fiscal 2026, Modine reported net sales of $682.8 million, up 3% from $661.5 million a year earlier. The increase was fueled by strong performance in the Climate Solutions segment, driven by sustained momentum and higher demand for data center products, as well as both organic and acquisition-driven growth in the HVAC Technologies group. Building on its strong first-quarter performance, the company anticipates a substantial volume ramp-up in the second half of the year and projects full-year fiscal 2026 net sales growth of 10-15% year over year. It expects adjusted EBITDA growth of 12-20% year over year.
The company’s 80/20 principles focus on acquiring businesses and investing in technologies to accelerate strategic growth in select markets. In April 2025, Modine acquired AbsolutAire, a manufacturer of direct-fired heating, ventilation and make-up air systems, followed by the acquisition of L.B. White in May 2025, a global leader in specialty heating solutions for the agriculture, construction and special event industries. L.B. White has since been integrated into Modine's HVAC Technologies product group. Both acquisitions support Modine’s strategy to address mission-critical thermal management challenges while expanding into adjacent markets with strong long-term growth potential.
In July, Modine completed the acquisition of Climate by Design International (CDI), a Minnesota-based company known for its desiccant dehumidification systems and specialized process air handlers. CDI adds significant expertise in desiccant-driven dehumidification and is recognized for its engineering excellence. Alongside earlier acquisitions of Napps Technology in 2023 and Scott Springfield in 2024, CDI further broadens Modine’s Commercial IAQ portfolio and opens access to new markets.
The company announced a $100 million investment over 12-18 months to expand U.S. manufacturing of Airedale by Modine data center cooling products. The plan includes a new Dallas facility, expansion in Grenada, MS and potential repurposing of sites in Franklin, WI and Jefferson City, MO. The investment will boost the company’s engineering, testing and product development. With rising demand, Modine expects data center revenues to approach $2 billion by fiscal 2028.
MOD’s Valuation & Estimates
MOD is trading at a forward price-to-sales (P/S) ratio of 2.33, slightly above the industry’s 2.11.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MOD’s fiscal 2026 sales and earnings indicates year-over-year growth of 11.3% and 14.3%, respectively. The Zacks Consensus Estimate for fiscal 2026 and 2027 EPS has moved up 11 cents and 46 cents, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Should You Buy the Stock Now?
Modine expects robust sales and adjusted EBITDA growth in fiscal 2026, supported by a substantial volume ramp-up in the second half. Acquisition of businesses will expand its presence into adjacent markets to underpin strong long-term growth potential. Investment in data center cooling products will help the company serve the rising demand and boost its top-line growth.
Moreover, the company has a return on equity (ROE) of 23.9% compared to the industry’s 7.2%. An ROE above 20% generally reflects very strong financial performance and efficient use of shareholder capital.
Taken together, these factors establish a solid foundation for the company’s long-term performance, suggesting that the present moment may represent an attractive and relatively secure entry point for prospective investors.
MOD carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.