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. Its products include heat transfer equipment, data center cooling solutions, powertrain cooling products, and coatings. The company was incorporated in 1916 and is headquartered in Racine, Wisconsin.
Modine's $4B Data Center Deal and Pure-Play Shift Drive Growth, But Margins Face Pressure
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Over $4 Billion Data Center Cooling Deal Secured Modine signed a long-term agreement to supply more than $4 billion of Airedale cooling products from 2027 to 2029, with a $165 million upfront cash payment. This gives unusually clear demand visibility and funds capacity expansion, supporting future revenue growth.
This is the largest new contract and directly boosts future revenue and confidence.
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First Supply Chain Constraints Emerge Component shortages appeared late in fiscal Q4, temporarily affecting Q1 production. While full-year outlook is unchanged, this shows scaling challenges that could delay deliveries and add costs, weighing on near-term results.
New operational risk that could impact near-term production and costs.
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Competitive Pressure from Vertiv Analysts favor Vertiv over Modine for AI cooling exposure, citing Vertiv's larger scale and better margins. Modine's gross margin fell 320 basis points due to expansion costs and tariffs, and it holds a Hold rating versus Vertiv's Buy, highlighting competitive challenges.
New analyst comparison that highlights Modine's relative competitive disadvantage.
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Pure-Play Transformation After Legacy Segment Sale Modine sold its cyclical Performance Technologies division, becoming a focused data center and HVAC company. Management targets $2.5 billion revenue in two years, and fund letters highlight the growth potential, driving investor enthusiasm.
New strategic shift that repositions Modine for higher growth and multiple expansion.
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Modine's AI cooling boom and Gentherm spin-off reshape the company
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Data center sales surge 90% on AI cooling demand Modine's data center sales jumped 90% to $348.6 million in the first quarter, with backlog more than doubling and record orders. Management expects data center revenue to top $2 billion by fiscal 2028. This strong demand for AI cooling products is the main reason the stock has risen and could keep pushing it higher.
This is the core growth driver behind Modine's stock and directly answers why it's moving.
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Margins squeezed by supply chain and component shortages Despite strong sales, gross margin fell to 20.8% and data center margins dropped to 14.8% from 22.1% due to component shortages and higher costs. This is a real counterweight: profits aren't growing as fast as sales, and the stock fell 3.9% after earnings even though the company beat profit estimates.
It shows the main risk that could hold the stock back and explains recent underperformance.
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Gentherm merger clears final hurdle, spin-off set for October 1 Gentherm shareholders approved the deal to combine Modine's Performance Technologies business with Gentherm, and the spin-off is set to close October 1. Modine will receive a $159 million cash distribution and its shareholders will get about 43.6% of the combined company. This simplifies Modine into a pure-play thermal management company focused on data centers.
This major corporate restructuring changes Modine's business mix and is a key reason for recent stock movement.
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Long-term capacity agreement provides revenue visibility through 2029 Modine has a capacity agreement covering more than $4 billion of Airedale chiller products for 2027-2029, with orders already coming in. This gives investors confidence in future revenue and supports the stock's valuation, even as near-term margins are pressured.
It explains why investors are willing to look past current margin issues and bid the stock up.
Q3 2026
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Modine's AI cooling boom and Gentherm spin-off reshape the company
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Data center sales surge 90% on AI cooling demand Modine's data center sales jumped 90% to $348.6 million in the first quarter, with backlog more than doubling and record orders. Management expects data center revenue to top $2 billion by fiscal 2028. This strong demand for AI cooling products is the main reason the stock has risen and could keep pushing it higher.
This is the core growth driver behind Modine's stock and directly answers why it's moving.
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Margins squeezed by supply chain and component shortages Despite strong sales, gross margin fell to 20.8% and data center margins dropped to 14.8% from 22.1% due to component shortages and higher costs. This is a real counterweight: profits aren't growing as fast as sales, and the stock fell 3.9% after earnings even though the company beat profit estimates.
It shows the main risk that could hold the stock back and explains recent underperformance.
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Gentherm merger clears final hurdle, spin-off set for October 1 Gentherm shareholders approved the deal to combine Modine's Performance Technologies business with Gentherm, and the spin-off is set to close October 1. Modine will receive a $159 million cash distribution and its shareholders will get about 43.6% of the combined company. This simplifies Modine into a pure-play thermal management company focused on data centers.
This major corporate restructuring changes Modine's business mix and is a key reason for recent stock movement.
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Long-term capacity agreement provides revenue visibility through 2029 Modine has a capacity agreement covering more than $4 billion of Airedale chiller products for 2027-2029, with orders already coming in. This gives investors confidence in future revenue and supports the stock's valuation, even as near-term margins are pressured.
It explains why investors are willing to look past current margin issues and bid the stock up.
News & notes movingMOD
United States
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Gentherm and Modine Set Spin-Off Record Date, Declare $58.35 Million Special Dividend
Gentherm and Modine Manufacturing Company announced additional details for the completion of their previously announced combination of Gentherm and Modine's Performance Technologies business, a Reverse Morris Trust transaction in which Modine will spin off the business held by Platinum SpinCo Inc. and then merge SpinCo into a Gentherm subsidiary. Modine's board set the close of business on September 28, 2026, as the record date for the SpinCo distribution, which is expected to occur on October 1, 2026, with the Merger to be completed immediately afterward the same day. Gentherm's board declared a special cash dividend estimated at an aggregate of $58,350,533, or an estimated $1.90 per share, payable October 7, 2026, to Gentherm shareholders of record as of September 28, 2026, conditioned on the closing of the Merger; Modine shareholders receiving Gentherm shares in the Merger will not be entitled to that dividend. Because trading since the merger agreement reduced overlapping ownership, the parties expect the exchange ratio to be increased, leading Gentherm to issue approximately 2,902,466 additional shares in the Merger, and to offset that value the cash distribution paid by SpinCo to Modine before the Merger will be reduced from $210 million to $159 million. Based on the expected exchange ratio and 31,230,226 fully diluted Gentherm shares as of September 16, 2026, Gentherm shareholders immediately prior to closing are expected to own approximately 56.4% of the combined company and former SpinCo holders approximately 43.6%, excluding overlapping ownership. Modine received a favorable Private Letter Ruling from the Internal Revenue Service, and Gentherm shareholders approved the share issuance and an authorized-share increase at a special meeting on September 10, 2026; closing remains subject to conditions including consummation of the SpinCo financing, continued validity of the Private Letter Ruling, Modine's receipt of a solvency opinion and Nasdaq listing approval.
MOD · Capital · Positive Modine completes the Reverse Morris Trust spin-off of its Performance Technologies business into Gentherm, a major corporate restructuring with an IRS favorable Private Letter Ruling.
THRM · Capital · Positive Gentherm declares a $58.35M special dividend (~$1.90/share) and will issue ~2.9M additional shares to merge with Modine's SpinCo, forming a combined company where Gentherm holders own ~56.4%.
Platinum SpinCo Inc. · Capital · Positive Platinum SpinCo Inc. is the spun-off entity holding Modine's Performance Technologies business that will merge into a Gentherm subsidiary.
Modine Manufacturing Data Center Sales Jump 90% as AI Cooling Demand Grows
Modine Manufacturing, a data center cooling provider, reported that its data center sales rose 90% to $348.6 million in its fiscal 2027 first quarter, while total revenue climbed 28% year over year. The company's backlog more than doubled over the same period, and management raised its full-year guidance, now projecting data center revenue will top $2 billion in fiscal 2028. Modine transformed itself from an auto parts supplier into a thermal management company whose climate solutions segment supplies cooling components to hyperscalers. Shares trade well below their 52-week high of $323 but have risen more than 280% over the past three years, carrying a trailing P/E above 70 and a forward P/E of 24. Risks include short-term AI infrastructure spending and high customer concentration in the data center segment.
Artificial Intelligence › AI Power & Cooling ▲Demand
MOD · Capital · Positive Management raised full-year guidance, projecting data center revenue to top $2 billion in fiscal 2028.
MOD · Demand · Positive Data center sales jumped 90% to $348.6M with backlog more than doubling, reflecting strong end-customer demand for its cooling products.
Gentherm Shareholders Approve Modine Merger, October 1 Close Set
Gentherm shareholders voted on September 10 to approve the combination of Modine's Performance Technologies business with Gentherm, clearing the last major hurdle before the two businesses become one. Roughly 99% of votes cast backed the share issuance needed to fund the deal, and about 94% of outstanding shares approved the charter amendment authorizing those new shares. Both companies have already cleared every required regulatory approval, including a private letter ruling from the Internal Revenue Service confirming the tax treatment of the share exchange, and the transaction is on track to close October 1, with the final exchange ratio set at closing under a mechanism built to preserve the deal's tax-free structure for Modine and its shareholders. The timing works in Gentherm's favor: second-quarter product revenue reached $416.2 million, reported on July 23, up 11.0% from $375.1 million a year earlier, and the company raised its full-year guidance on revenue, adjusted EBITDA, and adjusted free cash flow. That guidance explicitly excludes any impact from the Modine deal, so the final exchange ratio and the real financial effect of folding in the Performance Technologies business remain open questions even after the shareholder vote.
THRM · Capital · Positive Shareholders approved the share issuance and charter amendment for the Modine Performance Technologies merger, clearing the final hurdle to close October 1.
THRM · Demand · Positive Q2 product revenue rose 11.0% to $416.2 million and full-year revenue, EBITDA, and free cash flow guidance was raised, excluding the Modine deal.
MOD · Capital · Positive Gentherm shareholders approved combining Modine's Performance Technologies business with Gentherm, clearing the last major hurdle for the deal to close October 1.
Modine Manufacturing's shares have fallen 3.9% since its fiscal first-quarter earnings report, underperforming the S&P 500. The company reported adjusted earnings of $1.53 per share, up 44% year over year and beating the Zacks Consensus Estimate of $1.27 by 20.47%. Net sales rose 28% to $874.1 million, slightly missing the consensus estimate of $876 million. Data Centers sales surged 90% to $348.6 million, while Commercial HVAC sales increased 22% to $261.6 million and Performance Technologies revenues declined 3% to $277.8 million. Gross margin contracted 340 basis points to 20.8% due to supply chain pressures, and adjusted EBITDA margin fell to 12.2%. The company maintained its fiscal 2027 guidance for net sales growth of 20-35% and adjusted EBITDA of $650-$680 million, with Data Centers sales projected to increase 60-80%. However, the consensus estimate has shifted downward by 17.18% over the past month, and Modine holds a Zacks Rank #3 (Hold).
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.
Energy Transition & Power Demand › Behind-the-Meter & On-site Power ▲Demand
Energy Transition & Power Demand › Grid, Transmission & Power Equipment ▲Demand
Cloud & Digital Infrastructure › Mega-cap Hyperscalers ▲Demand
MOD · Demand · Positive Robust demand from hyperscale data center customers and accelerating growth in climate solutions, plus a long-term capacity agreement through 2029.
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.
Artificial Intelligence › AI Power & Cooling ▲Demand
MOD · Demand · Positive Modine is a key player in the growing direct-to-chip cooling market, which is projected to expand rapidly.
SMCI · Demand · Positive Super Micro is a key player in the growing direct-to-chip cooling market, which is projected to expand rapidly.
SU.PA · Demand · Positive Schneider Electric is a key player in the growing direct-to-chip cooling market, which is projected to expand rapidly.
VRT · Demand · Positive Vertiv is a key player in the growing direct-to-chip cooling market, which is projected to expand rapidly.
DCX Liquid Cooling Systems · Demand · Positive DCX Liquid Cooling Systems is a key player in the growing direct-to-chip cooling market, which is projected to expand rapidly.
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%.
MOD · Capital · Negative Shares dipped 1.2% despite earnings beat, as gross margin fell 320 bps due to capacity expansion costs, tariffs, and storm disruptions, and analyst estimates trended downward.
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.
Artificial Intelligence › AI Power & Cooling ▲Demand
MOD · Demand · Positive Growing exposure to data centre cooling driven by AI infrastructure investment, with management raising multi-year revenue targets.
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.
Artificial Intelligence › AI Power & Cooling ▲Demand
MOD · Demand · Positive Secured over $4 billion data center cooling deal with $165M upfront payment, providing multi-year demand visibility.
MOD · Capital · Positive Plans to spin off Performance Technologies segment to become pure-play Climate Solutions business.
Airedale International Air Conditioning · Demand · Positive Airedale cooling products are the subject of the $4 billion capacity agreement with Modine.
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.
Energy Transition & Power Demand › Grid, Transmission & Power Equipment ▲Demand
Artificial Intelligence › AI Power & Cooling ▲Competition
VRT · Demand · Positive Vertiv reported 30% revenue growth, record $15B backlog up 109% YoY, and projects 51% EPS growth, driven by strong AI data center cooling demand.
MOD · Competition · Negative Article positions Vertiv as the better AI data center cooling bet, with Modine's gross margins falling 320 bps due to expansion costs and tariffs, and Zacks rates Modine as Hold vs Vertiv's Buy.
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