Modine Manufacturing Company designs, engineers, tests, manufactures, and sells mission-critical thermal solutions in the United States, Canada, Italy, Hungary, the United Kingdom, China, and internationally. It offers heat transfer products, including round tube plate fin construction; gas-fired, hydronic, electric, and oil fired unit heaters; roof-mounted direct- and indirect-fired makeup air units, duct furnaces, infrared units, and perimeter heating products; single packaged unit ventilators, modular chillers, air handler and condensing units, and ceiling cassettes; evaporator unit coolers, remote condensers, fluid coolers, gas coolers, and dry and brine coolers; and motor and generator cooling coils, transformer oil coolers, radiators, dryers, and industrial heat exchangers. The company also provides data center products that consists of IT cooling solutions, including chillers, dry coolers, precision air handling units, computer room air conditioning, computer room air handler units, fan walls, rear-door heat exchangers, coolant distribution units, and immersion solutions, as well as sells replacement parts, maintenance service and control solutions for existing equipment and new building management controls and systems. In addition, it offers powertrain cooling products, such as radiators, condensers, engine cooling modules, charge air coolers, fan shrouds, and surge tanks; cooling module generator sets; aluminum and stainless steel engine oil coolers, exhaust gas recirculation coolers, liquid charge air coolers, transmission and retarder oil coolers, chillers, and condensers; battery thermal management systems, electronics cooling packages, battery chillers, battery cooling plates, coolers and casings for electronics cooling, and coolers for electric axles; and coatings products and application services. The company was incorporated in 1916 and is headquartered in Racine, Wisconsin.
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Modine's Data Center Sales Surge 90% but Margins Fall
Modine Manufacturing reported first-quarter fiscal 2027 revenue rose 28% year over year to $874.1 million and adjusted EPS jumped 44% to $1.53, but gross margin declined 340 basis points to 20.8% and adjusted EBITDA margin fell 270 basis points to 12.2%. The Data Centers segment saw revenue surge 90% while its adjusted EBITDA margin dropped to 14.8% from 22.1% a year earlier, as component shortages limited production and created labor inefficiencies and under-absorbed overhead. Commercial HVAC sales rose 22% to $261.6 million, helped by higher coil sales to data center customers and $19.7 million of incremental revenue from acquired businesses, but adjusted EBITDA margin slipped to 15.9% from 18.1%. Performance Technologies revenue declined 3% to $277.8 million and adjusted EBITDA fell 3% to $36.2 million, with margin edging down 10 basis points to 13% as higher material and tariff costs outpaced contractual cost recoveries. Modine expects Data Center margins to recover to 19-20% in the fiscal second quarter and targets $650-$680 million in adjusted EBITDA for fiscal 2027, representing roughly 38-44% growth and at least 100-200 basis points of margin expansion.
Wall Street Cuts Modine Manufacturing Earnings Outlook as Margin Pressures Mount
Wall Street analysts have trimmed their earnings estimates for Modine Manufacturing, with the Zacks Consensus Estimate for fiscal 2027 and 2028 EPS slipping 9 cents and 5 cents respectively over the past seven days. The downward revisions follow a fiscal first-quarter report that beat expectations but revealed a 340-basis-point drop in gross margin to 20.8%, driven by higher material costs, unfavorable mix, and lingering supply bottlenecks that dragged data center segment margin down an estimated 450 to 550 basis points. Management is targeting a sharp recovery to 19-20% data center margin in the second quarter and above 20% in the back half, a path that depends on timely supplier capacity expansion, pricing adjustments, and cost reimbursements. With the stock trading at 23.12 times forward earnings and the top 10 customers accounting for 49% of fiscal 2026 sales, concentration risk and a demanding guidance cadence leave little room for error. Modine Manufacturing currently carries a Zacks Rank of 4, or Sell.
Artisan Small Cap Fund Trimmed Modine Manufacturing After Strong Rally on Data Center Demand
Artisan Small Cap Fund reduced its position in Modine Manufacturing Company after the stock's strong appreciation, according to its second-quarter 2026 investor letter. The fund noted that Modine reported a solid quarter supported by robust demand from hyperscale data center customers and accelerating growth in its climate solutions business, and also announced a long-term capacity agreement reinforcing demand visibility through 2029. However, margin expansion remained slower than expected as the company continued to ramp capacity and absorb supply chain and input cost pressures. The fund trimmed the position because it had grown beyond the size it was comfortable maintaining, though it continues to view Modine as a durable franchise with an attractive profit cycle and reasonable valuation over a multiyear perspective. Modine Manufacturing Company closed at $241.79 per share on July 24, 2026, with a one-month return of -5.68% and a 52-week gain of 129.16%, and a market capitalization of $12.84 billion.
Data Center Direct-to-Chip Cooling Market to Reach $17.31 Billion by 2032
The global data center direct-to-chip cooling market is projected to grow from $3.33 billion in 2026 to $17.31 billion by 2032, a compound annual growth rate of 26.5%. Single-phase systems are expected to dominate by type due to their reliability and compatibility with existing infrastructure. Water-glycol-based coolants are forecast to hold the largest share by coolant type, driven by cost-effectiveness and industry acceptance. Hyperscale data centers are anticipated to lead end-user demand, fueled by investments from major cloud and tech companies in AI and machine learning workloads. Key players include Vertiv Group Corp., Super Micro Computer, Inc., Modine Manufacturing Company, DCX Liquid Cooling Systems, and Schneider Electric.
Modine Earns Strong Buy Consensus but Zacks Rank Suggests Caution
Wall Street analysts overwhelmingly rate Modine a Strong Buy, with an average brokerage recommendation of 1.20 based on 10 ratings, nine of which are Strong Buy. However, Zacks Investment Research assigns the stock a Zacks Rank #3 (Hold), citing an unchanged consensus earnings estimate of $7.73 for the current year. Zacks cautions that brokerage recommendations often carry a positive bias and may not reliably predict price movements, whereas its own rank is driven by earnings estimate revisions. Investors are advised to be cautious despite the bullish analyst consensus.
Modine Q4 Earnings Beat Estimates but Shares Dip 1.2%
Modine posted adjusted earnings of $1.71 per share for the fourth quarter of fiscal 2026, a 53% increase from the prior year and above the Zacks Consensus Estimate of $1.51. Net sales rose 47% to $954.4 million, exceeding the consensus of $907 million, driven by data center cooling revenue that surpassed $400 million in the quarter. Gross margin fell 320 basis points to 22.5% due to capacity expansion costs, higher tariffs, and storm-related disruptions, while operating income still climbed to $103.9 million. Climate Solutions segment sales surged 87% to $665.9 million, with data center sales jumping 158%, and Performance Technologies sales were nearly flat at $294 million ahead of its planned spin-off. For fiscal 2027, Modine expects net sales growth of 20% to 35% and adjusted EBITDA of $650 million to $680 million, though analyst estimates have since trended downward by 13.58%.
Modine Manufacturing Gains on Data Centre Cooling Exposure, Says Carillon Eagle Fund
Carillon Eagle Small Cap Growth Fund highlighted Modine Manufacturing Company as a notable contributor in its first-quarter 2026 investor letter, citing strong performance driven by growing exposure to data centre cooling. The fund noted that Modine is well positioned to benefit from accelerating investment in high-performance computing and artificial intelligence infrastructure, with management raising expectations to significantly exceed recently issued multi-year data centre revenue targets. The announced sale of its Performance Technologies segment, which serves lower-growth automotive and transportation markets, transforms Modine into a more focused, higher-growth pure play on data centres and commercial HVAC. Modine shares gained 173.30% over the past 52 weeks and closed at $277.46 on June 23, 2026, with a market capitalization of $14.65 billion.
Modine Manufacturing Advanced Following Cyclical Segment Exit
Modine Manufacturing Company saw its stock rise substantially after selling a legacy division exposed to cyclical markets such as trucks and off-road vehicles, according to Osterweis Opportunity Fund's first-quarter 2026 investor letter. The fund highlighted Modine as its biggest contributor in the quarter, noting the company currently generates $1 billion in annual revenue and is targeting $2.5 billion in two years, driven by HVAC equipment for AI data centers. Modine's shares closed at $297.37 on June 18, 2026, with a one-month return of 14.14% and a 52-week gain of 207.45%, giving it a market capitalization of $15.71 billion. The Osterweis Opportunity Fund returned -3.78% in the quarter, underperforming the Russell 2000 Growth Index's -2.81%, as security selection helped but sector allocation weighed on results.
Modine Manufacturing Secures Over $4 Billion Data Center Cooling Deal and Plans Spin-Off
Modine Manufacturing announced a long-term capacity agreement reserving over US$4 billion of Airedale data center cooling products for 2027 to 2029, supported by a US$165 million upfront payment. The deal provides multi-year demand visibility and accelerates the company's exposure to AI-driven data centers. Modine is also spinning off its Performance Technologies segment to become a pure-play Climate Solutions business. The company's narrative projects $6.6 billion in revenue and $902.7 million in earnings by 2029, requiring 27.3% annual revenue growth. Some analysts estimate revenue could reach about US$7.0 billion and earnings roughly US$947 million by 2029, though they view the stock as fairly valued given customer concentration and supply chain risks.
Prosper Stars & Stripes exited Modine Manufacturing in March after it became the top long-book contributor
Prosper Stars & Stripes, a long/short equity fund, reported that Modine Manufacturing Company was the top contributor in its long book during the first quarter of 2026. The fund highlighted Modine's industrial transformation, repositioning its thermal engineering expertise toward higher-growth markets like AI data centers, and noted that its data center business delivered annual revenue growth exceeding 60% over the past three years. However, consistent with its valuation discipline, the fund exited the position in March when the EV/EBITDA multiple reached 20 times, which it viewed as fair value. Modine shares gained 195.40% over the past 52 weeks and closed at $283.88 on June 17, 2026, with a market capitalization of $14.99 billion.
Modine Manufacturing Faces First Supply Chain Constraints in Data Center Business
Modine Manufacturing Company is encountering supply chain constraints for the first time as it scales its data center business, which has doubled for four consecutive years. Component shortages emerged late in the fourth quarter of fiscal 2026, prompting the company to work closely with key suppliers and qualify new vendors to stabilize supply. While these challenges are expected to temporarily affect first-quarter production plans, Modine does not anticipate any impact on its full-year outlook and projects data center sales growth of 60 to 80 percent year over year for fiscal 2027. The company has invested heavily in talent and resources to support expansion and maintain capacity, and demand in the data center market remains exceptionally strong with no signs of a slowdown.
Modine Manufacturing Stock Rises 16.6% in a Month, Outpacing Market
Modine Manufacturing shares have returned 16.6% over the past month, far exceeding the Zacks S&P 500 composite's 1.6% gain and the 7.4% rise in the Zacks Automotive - Original Equipment industry. The company is expected to post earnings of $1.43 per share for the current quarter, a 34.9% increase from a year ago, though the Zacks Consensus Estimate has fallen 13.6% over the last 30 days. For the current fiscal year, the consensus earnings estimate is $7.73, up 54% year over year and 7% higher over the past month, while the next fiscal year's estimate of $10.86 implies 40.5% growth and has risen 11.2% in the same period. Modine reported revenues of $954.4 million in its most recent quarter, a 47.5% jump, beating the consensus estimate by 5.19%, and has topped both earnings and revenue estimates in each of the trailing four quarters. The stock carries a Zacks Rank of 3, or Hold, and a Value Style Score of D, indicating it trades at a premium to peers.
Vertiv Outshines Modine as the Better AI Data Center Cooling Bet
Vertiv Holdings is the stronger investment in AI data center cooling compared to Modine Manufacturing, according to Zacks Investment Research. Vertiv reported first-quarter 2026 revenue growth of 30% year over year, with organic sales up 23%, and projects full-year net sales of $13.5 billion to $14 billion alongside adjusted earnings per share of $6.30 to $6.40, implying roughly 51% EPS growth. The company exited 2025 with a record order backlog of $15 billion, up 109% year over year, providing multi-year revenue visibility. Modine's data center revenues hit $1.1 billion in fiscal 2026, a 73% increase, and it secured a long-term capacity agreement worth more than $4 billion for Airedale chiller products between 2027 and 2029, but gross margins fell 320 basis points in the latest quarter due to expansion costs and tariffs. While Modine trades at 3.5 times forward sales versus Vertiv's 7.5 times, Vertiv's scale, integrated portfolio, and proven hyperscaler relationships justify the premium, earning it a Zacks Rank of 2, or Buy, compared to Modine's Hold rating.