Is It Too Late To Consider Modine Manufacturing After Its Massive Multi Year Surge?

• Wondering if Modine Manufacturing is still a smart buy after its huge run up, or if the easy money has already been made? You are not alone. This article will unpack whether the current price still stacks up against the fundamentals.
• The stock has cooled off recently, slipping about 4.3% over the last week and 5.4% over the past month. It is still up 15.3% year to date and 581.9% over three years and 1000.4% over five years.
• Those kinds of multi year gains often come after the market wakes up to a company’s strategic shifts, new end markets, or operational improvements that change its long term earnings power. Even without fixating on quarterly numbers, investors have been responding to a steady stream of updates about Modine’s positioning in areas like advanced thermal management, electrification, and efficiency focused solutions that could support structurally higher returns.
• With a valuation score of 4/6, Modine screens as undervalued on several key metrics. However, the picture gets more nuanced once we compare different valuation approaches and, later on, explore a more holistic way to judge whether the stock’s current price really reflects its long term potential.

Modine Manufacturing delivered 12.6% returns over the last year. See how this stacks up to the rest of the Building industry.

Approach 1: Modine Manufacturing Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to their value in today’s dollars.

For Modine Manufacturing, the latest twelve month Free Cash Flow is about $53.0 million. Analysts and internal estimates see this building steadily, with projections reaching roughly $909.4 million in 2035 as Modine scales its thermal management and electrification businesses. The model used here is a 2 Stage Free Cash Flow to Equity framework, which blends near term analyst forecasts with longer term, slowing growth assumptions extrapolated by Simply Wall St.

Based on these inputs, the estimated intrinsic value comes out at about $210.71 per share. This indicates that the stock is trading at a 36.4% discount to its DCF fair value, which in turn indicates that the current market price may not fully reflect the cash flow growth that Modine could deliver if its strategy plays out as expected.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Modine Manufacturing is undervalued by 36.4%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Modine Manufacturing.

Approach 2: Modine Manufacturing Price vs Earnings

For profitable companies like Modine, the Price to Earnings, or PE, ratio is a practical way to gauge how much investors are willing to pay today for each dollar of current earnings. A higher PE can be justified when a business is expected to grow faster or is seen as less risky, while slower growth or higher uncertainty usually calls for a lower, more conservative PE.

Modine currently trades on a PE of about 37.9x, well above the broader Building industry average of roughly 19.7x and also ahead of the peer group average near 26.7x. At first glance, that premium suggests the market is incorporating expectations of stronger growth or better quality than typical sector names.

Simply Wall St’s Fair Ratio framework goes a step further by estimating what PE Modine might command after considering its earnings growth outlook, profitability, risk profile, industry and market cap. On this basis, Modine’s Fair PE is a much higher 53.7x, indicating that the stock’s current valuation may not fully reflect the company’s fundamentals and potential growth runway.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Modine Manufacturing Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your own plain language story about Modine that links what you think will happen to its business with a concrete financial forecast and a resulting fair value estimate, all created through an easy tool on Simply Wall St’s Community page that millions of investors use. Narratives let you spell out why Modine’s revenue, earnings and margins might rise or fall, automatically turn those assumptions into projected cash flows and fair value, and then compare that fair value to today’s share price so you can judge whether it looks like a buy, a hold, or a sell. They also stay alive in real time, updating dynamically as new news, earnings and guidance arrive, so your view does not go stale. For example, one Modine Narrative might see data center expansion and margin gains driving a fair value near 185 dollars, while a more cautious view that focuses on execution and concentration risks might arrive closer to 145 dollars, and Narratives make both perspectives transparent and comparable.

Do you think there's more to the story for Modine Manufacturing? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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