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MOD vs. THRM: Which Thermal Management Stock is the Better Buy?
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Key Takeaways
Modine posted Q1 sales of $682.8M, up 3% on Climate Solutions strength and HVAC growth.
Gentherm won $620M in new auto awards, lifting 2025 revenue outlook to $1.43-$1.5B.
Modine projects 10-15% FY26 sales growth, while Gentherm expands ties with China OEMs.
Modine Manufacturing Company (MOD - Free Report) and Gentherm Incorporated (THRM - Free Report) both manufacture thermal management technologies for the automotive sector. Besides catering to the automotive market, Modine also provides farm and construction machinery and equipment and heating and cooling equipment for residential and commercial building heating, ventilating, air conditioning and refrigeration equipment (HVAC). Gentherm is also building thermoelectric generators to capture the heat and convert it into electricity for various applications to serve the industrial and materials sectors.
Amid the tariff-related uncertainty that impacts customer orders, which one of these is better-equipped to weather the challenges and live up to investors’ expectations? Let’s dig deeper into the fundamentals of both these stocks to unravel their strengths and weaknesses.
The Case for Modine Stock
MOD has exceeded earnings expectations in each of the last four quarters. 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.
Modine has adopted the 80/20 principles, which are based on the idea that 80% of results come from 20% of inputs. By applying these principles, the company achieved transformative changes and delivered significant improvements in both its operations and financial performance during fiscal 2025.
In April 2025, Modine acquired AbsolutAire, followed by the acquisition of L.B. White in May 2025. 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). 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.
In July, Modine announced a $100 million investment over 12-18 months to expand U.S. manufacturing of Airedale by Modine data center cooling products. 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.
The company has a high return on equity (ROE) of 24% compared with the industry’s 7.2%. ROE of more than 20% generally indicates that a company is generating strong profits relative to the shareholders’ equity invested in it. While Modine is facing higher costs related to tariffs and rising material prices, it plans to pass these extra costs on to customers, just as it has done previously.
The Case for Gentherm
In the second quarter of 2025, Gentherm reported revenues of $375 million, which remained stable year over year. The company’s Automotive Climate and Comfort Solutions revenues grew 3.8% year over year. The year-over-year growth outperformed S&P Global’s mid-July light vehicle production report in its relevant markets by 10 basis points, driven by strong performance in North America and Europe, partially offset by weakness in Asia.
The company is actively refining its pursuit strategies to narrow the gap in Asia. Progress is evident in China, where 70% of year-to-date awards have been with domestic OEMs, compared to 50% over the past two years. Historically, revenues in China was weighted 80-20 in favor of global OEMs, but by next year, the company expects a shift closer to 60-40. Aligning more closely with China’s domestic OEMs remains a key strategic priority.
In the second quarter, the company secured $620 million in new automotive business awards, including Ford’s next-generation F-Series truck platform and multiple awards for Puls.A. Year to date, new automotive business awards have exceeded $1 billion. On the back of strong business wins, the company now expects 2025 revenues to be in the range of $1.43-$1.5 billion, up from the previous estimate of $1.4 billion.
Gentherm continues to strengthen its medical business for future growth. It announced an expanded strategic partnership with DUOMED to enhance European distribution, improving market access for its current product portfolio, while also advancing development of new medical products.
On the flip side, in the second quarter, tariffs represented roughly a 15-basis-point headwind. As a result, the company narrowed its EBITDA margin guidance range to 11.7-12.5%, compared with the prior range of 11.5-13%. While the company has a high ROE of 9.9% compared to the industry, it is less than that of Modine.
Price Performance and Valuation of MOD & THRM
Year to date, Modine shares have risen roughly 31.5%, while Gentherm stock has lost 11%.
Image Source: Zacks Investment Research
Modine is trading at a forward sales multiple of 2.62X, closer to its mean of 2.72X over the last five years. Gentherm’s forward sales multiple sits at 0.73X, way below its median of 2.85X over the last five years.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for MOD & THRM?
The Zacks Consensus Estimate for MOD’s fiscal 2026 EPS implies year-over-year growth of 14.3%. The EPS estimates for fiscal 2026 and 2027 have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for THRM’s 2025 EPS implies a year-over-year decline of 4.3%; however, the EPS estimates have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
Conclusion
Modine has been delivering solid top-line growth and projects double-digit revenue and EBITDA gains for fiscal 2026. Its acquisitions and $100 million U.S. investment in data center cooling position it well for growth, with the potential for data center revenues to approach $2 billion by 2028. Also, Modine’s high ROE underscores its ability to generate strong shareholder value.
Gentherm, on the other hand, has shown resilience with steady revenues and strong automotive business wins, including progress in shifting toward Chinese domestic OEMs. Its diversification into the medical sector also provides an additional growth route. However, its ROE lags significantly behind Modine’s, and tariffs are already pressuring its margins.
While Gentherm demonstrates solid strategic execution, Modine’s stronger financial performance, higher profitability metrics and clearer long-term growth strategy make it the more attractive pick between the two.
Image: Bigstock
MOD vs. THRM: Which Thermal Management Stock is the Better Buy?
Key Takeaways
Modine Manufacturing Company (MOD - Free Report) and Gentherm Incorporated (THRM - Free Report) both manufacture thermal management technologies for the automotive sector. Besides catering to the automotive market, Modine also provides farm and construction machinery and equipment and heating and cooling equipment for residential and commercial building heating, ventilating, air conditioning and refrigeration equipment (HVAC). Gentherm is also building thermoelectric generators to capture the heat and convert it into electricity for various applications to serve the industrial and materials sectors.
Amid the tariff-related uncertainty that impacts customer orders, which one of these is better-equipped to weather the challenges and live up to investors’ expectations? Let’s dig deeper into the fundamentals of both these stocks to unravel their strengths and weaknesses.
The Case for Modine Stock
MOD has exceeded earnings expectations in each of the last four quarters. 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.
Modine has adopted the 80/20 principles, which are based on the idea that 80% of results come from 20% of inputs. By applying these principles, the company achieved transformative changes and delivered significant improvements in both its operations and financial performance during fiscal 2025.
In April 2025, Modine acquired AbsolutAire, followed by the acquisition of L.B. White in May 2025. 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). 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.
In July, Modine announced a $100 million investment over 12-18 months to expand U.S. manufacturing of Airedale by Modine data center cooling products. 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.
The company has a high return on equity (ROE) of 24% compared with the industry’s 7.2%. ROE of more than 20% generally indicates that a company is generating strong profits relative to the shareholders’ equity invested in it. While Modine is facing higher costs related to tariffs and rising material prices, it plans to pass these extra costs on to customers, just as it has done previously.
The Case for Gentherm
In the second quarter of 2025, Gentherm reported revenues of $375 million, which remained stable year over year. The company’s Automotive Climate and Comfort Solutions revenues grew 3.8% year over year. The year-over-year growth outperformed S&P Global’s mid-July light vehicle production report in its relevant markets by 10 basis points, driven by strong performance in North America and Europe, partially offset by weakness in Asia.
The company is actively refining its pursuit strategies to narrow the gap in Asia. Progress is evident in China, where 70% of year-to-date awards have been with domestic OEMs, compared to 50% over the past two years. Historically, revenues in China was weighted 80-20 in favor of global OEMs, but by next year, the company expects a shift closer to 60-40. Aligning more closely with China’s domestic OEMs remains a key strategic priority.
In the second quarter, the company secured $620 million in new automotive business awards, including Ford’s next-generation F-Series truck platform and multiple awards for Puls.A. Year to date, new automotive business awards have exceeded $1 billion. On the back of strong business wins, the company now expects 2025 revenues to be in the range of $1.43-$1.5 billion, up from the previous estimate of $1.4 billion.
Gentherm continues to strengthen its medical business for future growth. It announced an expanded strategic partnership with DUOMED to enhance European distribution, improving market access for its current product portfolio, while also advancing development of new medical products.
On the flip side, in the second quarter, tariffs represented roughly a 15-basis-point headwind. As a result, the company narrowed its EBITDA margin guidance range to 11.7-12.5%, compared with the prior range of 11.5-13%. While the company has a high ROE of 9.9% compared to the industry, it is less than that of Modine.
Price Performance and Valuation of MOD & THRM
Year to date, Modine shares have risen roughly 31.5%, while Gentherm stock has lost 11%.
Image Source: Zacks Investment Research
Modine is trading at a forward sales multiple of 2.62X, closer to its mean of 2.72X over the last five years. Gentherm’s forward sales multiple sits at 0.73X, way below its median of 2.85X over the last five years.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for MOD & THRM?
The Zacks Consensus Estimate for MOD’s fiscal 2026 EPS implies year-over-year growth of 14.3%. The EPS estimates for fiscal 2026 and 2027 have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for THRM’s 2025 EPS implies a year-over-year decline of 4.3%; however, the EPS estimates have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
Conclusion
Modine has been delivering solid top-line growth and projects double-digit revenue and EBITDA gains for fiscal 2026. Its acquisitions and $100 million U.S. investment in data center cooling position it well for growth, with the potential for data center revenues to approach $2 billion by 2028. Also, Modine’s high ROE underscores its ability to generate strong shareholder value.
Gentherm, on the other hand, has shown resilience with steady revenues and strong automotive business wins, including progress in shifting toward Chinese domestic OEMs. Its diversification into the medical sector also provides an additional growth route. However, its ROE lags significantly behind Modine’s, and tariffs are already pressuring its margins.
While Gentherm demonstrates solid strategic execution, Modine’s stronger financial performance, higher profitability metrics and clearer long-term growth strategy make it the more attractive pick between the two.
While MOD sports a Zacks Rank #1 (Strong Buy), THRM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.