MEC Should I Buy
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Mayville Engineering Company Inc (MEC) is not a strong buy for a beginner investor with a long-term strategy at this moment. While the company has shown revenue growth, its declining margins, negative EPS, and cautious guidance for 2026 raise concerns. Additionally, technical indicators and options data suggest bearish sentiment, and there are no strong proprietary trading signals to support an immediate buy decision.
The MACD is negative and expanding (-0.356), indicating bearish momentum. RSI is neutral at 22.275, and moving averages are converging, showing no clear trend. The stock is trading near its support level of 18.809, with resistance at 20.4. Overall, technical indicators suggest a weak price trend.
Revenue increased by 10.7% YoY in Q4 2025, driven by strong demand in the Data Center sector. Analysts have recently raised their price targets to $25, reflecting some optimism about the company's potential.
Options data and technical indicators suggest bearish sentiment.
In Q4 2025, revenue grew by 10.7% YoY to $134.3 million. However, net income dropped to -$4.36 million, and EPS declined to -$0.21. Gross margin fell to 4.31%, down 42.3% YoY, indicating profitability challenges.
Analysts have recently upgraded the stock, with Citi and Northland raising price targets to $25. However, a prior downgrade in January highlighted concerns about valuation and resistance levels.
