Mayville Engineering Company's Plunge Has Been Unreasonable

Mayville Engineering Company (MEC) is upgraded to ‘strong buy’ after a 40.9% share price drop, despite ongoing top-line growth and raised revenue guidance. MEC’s revenue guidance is now $620–$650 million for the year, reflecting robust data center, critical power, and commercial vehicle demand. Profitability metrics are mixed: net loss widened, but manufacturing margin and adjusted operating cash flow improved; EBITDA guidance remains $52–$60 million. Valuation is compelling—MEC trades at a discount to peers, with potential upside of 99.5%–174.2%, though recent equity dilution to reduce debt weighed on sentiment.

In early June of this year, I made the decision to downgrade shares of Mayville Engineering Company ( MEC ) from a ‘strong buy’ to a ‘buy’. This came after what I described as a historic run