Company Overview
Mayville Engineering Company, Inc. engages in the production, design, prototyping, and tooling, fabrication, aluminum extrusion, coating, and assembling of aftermarket components within the United States, supplying engineered parts to original equipment manufacturers. The company operates within the Industrials sector, specifically inside the Metal Fabrication industry, a segment characterized by the manufacturing of physical goods and machinery essential for broader industrial operations. Its current scale is defined by a market capitalization of $371.83M, annual revenue of $546.49M, and an workforce comprising 2400 employees. These financial figures indicate that the company holds a mid-cap position, reflecting a substantial operational footprint that allows it to serve a wide array of customers while maintaining a significant presence in the metal fabrication landscape without yet achieving large-cap status.
Financial Health
The company reported a trailing twelve-month revenue of $546.49M alongside a net income of $-8,110,000 and an EBITDA of $42.32M. The substantial gap between the $546.49M in revenue and the negative net income reveals a cost structure where operating expenses, including interest costs and taxes, are high enough to erase all operating profits before interest and taxes, resulting in a reported loss despite strong operational cash generation. Despite the negative net income, the company maintains a free cash flow of $21.41M, which provides critical financial flexibility by allowing the business to fund operations, service debt, or invest in capital projects without relying on external equity financing. The margin profile shows a gross margin of 11.5%, an operating margin of -4.6%, and a profit margin of -1.5%, indicating that while the cost of goods sold consumes roughly 88.5% of revenue, other overheads and interest burdens are pushing operating profitability into negative territory. On the balance sheet, the company holds $1.50M in cash against $239.10M in total debt, creating a highly leveraged position evidenced by a debt-to-equity ratio of 99.32. This leverage implies that the company relies heavily on borrowed capital, making it sensitive to interest rate fluctuations and economic downturns in its supply chain. Liquidity is managed via a current ratio of 1.72, suggesting the firm possesses sufficient current assets to cover its short-term liabilities, though the margin for error remains narrow given the high debt load. Return metrics further highlight the financial pressure, with a return on equity of -3.3% and a return on assets of 0.1%, indicating that management has not yet generated returns that exceed the cost of capital or the risk-free rate.
Valuation Assessment
Valuation multiples for Mayville Engineering Company, Inc. show a trailing P/E ratio of N/A due to the negative earnings, while the forward P/E stands at 14.35. The absence of a trailing P/E and the presence of a forward P/E imply that the market is pricing in a future earnings turnaround or restructuring rather than valuing the company based on current profitability. The price-to-book ratio is 1.54, which indicates that the market is currently valuing the company at 1.54 times its book value, suggesting a slight premium over the net asset value despite the negative equity position often associated with losses. Alternative valuation metrics provide different perspectives, with a price-to-sales ratio of 0.68 and an EV/EBITDA of 14.40, suggesting the market is willing to pay a relatively low multiple of sales but a moderate multiple of earnings before interest, taxes, depreciation, and amortization. The stock's trading range is bounded by a 52-week high of $22.36 and a 52-week low of $11.72, placing the current valuation context within this historical volatility band. The beta value is 1.08, meaning the stock's price volatility is slightly higher than the broader market, moving 8% more than the market index on average during periods of systemic risk.
Growth & Income
Revenue growth for the company is 10.7% year over year, whereas earnings growth is N/A due to the current net loss. Since earnings are negative, they are technically growing slower than revenue in terms of absolute dollar value, but the more relevant metric here is the divergence between top-line expansion and bottom-line contraction, which implies that revenue gains are being absorbed by fixed costs or interest expenses rather than translating into profit. As a non-dividend payer, the company does not distribute a dividend yield or has a payout ratio of 0.0%, indicating that all available cash flow is being retained within the business to service its $239.10M in debt or fund operations rather than being paid out to shareholders. The overall growth and income profile is characterized by double-digit top-line expansion coupled with a complete absence of dividend income and negative net income, creating a scenario where investors rely on potential future earnings recovery rather than current cash distributions or capital appreciation derived from yield.