SPX TECHNOLOGIES, INC. (SPXC): what the price assumes

In the published model solve dated 2026-Q2, anchored at $214.95, SPX TECHNOLOGIES, INC. (SPXC) is priced for today's economics sustained for ~8.0 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/SPXC

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10.6% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.

Reconcile: at the x-ray's 9.3% required return this reads ~5.5 years; the models below use their own rates.

How unusual the bet is: elevated

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.3%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• SPX Technologies is riding data-center cooling demand with an HVAC backlog of $755 million, up 38% organically, and a 2026 data-center revenue target raised from $200 million to $350 million.
• The concentrated risk is that the price already assumes the boom persists: at about 34 times operating income the market needs roughly a decade of ceiling-rate profit growth, while the filing notes many businesses "derive revenues from large projects or key customer relationships" [FY2025 10-K, accession 0000088205-26-000008].
• Watch backlog conversion as the new Alabama and Tennessee capacity (roughly $700 million of incremental production at full output) ramps through 2026-2027.

Bull Case

The balance sheet is the quiet tell in the SPX story. A company spending this aggressively, roughly CAD 200 million for Thermolec in January, about $300 million for the Crawford United air-handling businesses, and $100 million of 2026 capex on new plants, is carrying only $517 million of net debt, about 1.4 times trailing operating income, with interest coverage of 8.4 times. Management is funding an acquisition streak and a $700 million capacity build largely out of operating cash flow, which is what a leadership team does when it can see the orders that will fill the plants. The backlog says they can: HVAC backlog stood at $755 million at quarter end, up 38% organically, driven primarily by data-center demand.

The demand is verifiable, not narrative. First-quarter HVAC revenue grew 22% to $394 million on data-center and heating strength, and management raised its full-year 2026 data-center revenue target from $200 million to $350 million while lifting total guidance to $2.575 to $2.645 billion of revenue and $7.75 to $8.15 of adjusted EPS. Cooling is a physics tax on AI compute: every megawatt of data-center capacity needs heat rejection, and SPX sells the cooling towers and air handling that do it. Meanwhile the second segment compounds quietly: Detection & Measurement revenue rose 8.3% with segment income up 28% and margins up 410 basis points on a richer software mix, the kind of mix shift that outlasts any single capex cycle.

The acquisition engine is the multiplier. Thermolec, the Crawford air-handling businesses (adding roughly $80 million of combined annual revenue across healthcare, institutional, and data-center customers), KTS, and Sigma & Omega all bolt onto the same channel, and SPX has repeatedly bought niche engineered-products firms and lifted them with its distribution. The street sees the same flywheel, with targets in the $260 range against $219.47 today. A bolt-on machine with a 38% organic backlog tailwind, low leverage, and two new plants coming online is a growth thesis with its funding, demand, and capacity all visible at once.

Bear Case

Say the structural truth plainly: this multiple prices a future that has not happened yet. At about 34 times trailing operating income, today's price implies operating profit growing near its feasible ceiling for roughly ten years, and only about 15% of comparable fast-growers have ever sustained that. The $350 million data-center revenue target is a target; the $700 million of incremental capacity is two plants still ramping; the $260 street targets assume the backlog converts on schedule. The one number that is fully real today, trailing operating income of $371.5 million against an $11.1 billion enterprise, is the one the price has left furthest behind. The market noticed the tension in May: the stock fell 6.6% on the very day the company RAISED guidance, which is what happens when a raise merely meets what the multiple already assumed.

The demand itself carries concentration and cycle risk the filing is explicit about: many SPX businesses "derive revenues from large projects or key customer relationships" [FY2025 10-K, accession 0000088205-26-000008], and data-center cooling is the largest of large projects, ordered by a handful of hyperscale builders whose capex plans can pause abruptly. The peak-data-center debate is precisely about that pause risk, and SPX is spending $160 million across 2025-2026 to expand capacity into it. Competition is not asleep either; the 10-K names rivals with "substantial technological and financial resources, brand recognition and established relationships", some with "lower cost" structures [FY2025 10-K, accession 0000088205-26-000008]. Cooling towers and air handlers are excellent businesses but not proprietary ones; a demand boom invites capacity from everyone.

The roll-up adds its own execution layer. Four acquisitions in recent quarters must be integrated while two greenfield plants ramp, and the filing concedes integration "may place substantial demands on our management, operational resources and financial and internal control systems" [FY2025 10-K, accession 0000088205-26-000008]. The heating side remains weather-cyclical, with the 10-K attributing past declines to "unseasonably warm winter conditions" [FY2025 10-K, accession 0000088205-26-000008], and the share count drifts up about 2% a year, so per-share outcomes lag the enterprise story. None of this requires anything to go wrong at SPX for the stock to disappoint; it only requires the decade of ceiling-rate growth the price assumes to be, instead, a strong five years.

Valuation

At $219.47 the market pays about 34 times company-wide operating income, which at a 10.7% cost of capital implies operating profit growing near its 25% self-funding ceiling for about ten years. Hold the precision loosely; the calibration is the point. The near-term pace is within what SPX has recently delivered, so the stretch is duration, not rate, and duration is where the history gets thin: roughly 15% of comparable fast-growers sustained such growth for close to a decade. The priced-in assumption sits above what the fundamentals comfortably support, which the input labels elevated.

Where the price falls against the methods confirms it. No family of valuation lens reaches today's price: the forward-growth methods come closest, with the price about 16% above their central read (the exit-multiple variant lands essentially at the price, but only by holding a generous terminal multiple), peer comparisons sit at roughly 55% of the price, and the earnings-power and asset-based lenses land at roughly a quarter of it. When even the growth-crediting methods fall short, the residual is a pure duration-and-optionality premium on the data-center capex cycle. The street's targets near $260 get there by crediting the $755 million HVAC backlog and the new capacity as if converted; this framework prices the same facts as a bet still outstanding rather than revenue already earned, which is the honest reconciliation of the two numbers.

The balance sheet is the redeeming feature and the reason the bet can survive turbulence: net debt of $517.5 million runs about 1.4 times trailing operating income (1.7 times after tax), interest coverage is 8.4 times, and the company generates cash while funding both the acquisitions and the plant build. Guidance for 2026, raised in April, calls for $2.575 to $2.645 billion of revenue and adjusted EBITDA of $600 to $625 million. What has to be true for the price is specific: data-center orders keep arriving after the current backlog converts, the new capacity fills as it opens, and the ten-year growth clock keeps running without a hyperscaler capex pause. The balance sheet buys time; it does not shorten the requirement.

Catalysts

Backlog conversion is the running catalyst: HVAC backlog of $755 million (up 38% organically) and the raised $350 million data-center revenue target for 2026 get marked to reality at each quarterly print, on the company's late-July cadence for Q2. The Alabama and Tennessee capacity ramp, roughly $700 million of incremental production at full output funded by about $100 million of 2026 capex, has its own milestones; commissioning updates and any commentary on absorption costs move the margin line.

Integration progress across the recent deal stack, Thermolec (closed January 20, 2026, approximately CAD 200 million), the Crawford United air-handling businesses (about $300 million, roughly $80 million of annual revenue), KTS, and Sigma & Omega, shows up in HVAC segment margins over the next several quarters; the Q1 print carried a 22% HVAC revenue growth rate with acquisitions contributing. In Detection & Measurement, watch whether the higher-margin software mix that drove segment income up 28% persists and whether the $333 million backlog, down modestly year over year, stabilizes.

Sentiment runs hot-and-cold around the data-center theme: the stock fell 6.6% after the guidance raise on peak-capex fears while street targets cluster near $260. Hyperscaler capex announcements are the exogenous variable; SPX reprices on them without printing a number of its own.

Peer Cohorts (Per Segment, With Filing Citations)

HVAC (reported)

• AAON (AAON, INC.)
• FY2025 10-K: …Gary D. Fields Customer Exploration Center. The NAIC is a world-class research and development laboratory accredited by the Air Movement and Control Association International, Inc. ("AMCA"), where our products are continuously tested under extreme environmental conditions to ensure optimal performance, efficiency,…
• FY2025 10-K: 0 ton and a 300 ton chamber, allowing us to uniquely prove to customers our capacity and efficiency on these larger units. The NAIC was designed to test products well beyond the standard AHRI rating points and allows us to offer testing services on our equipment throughout our range of product application. This…
• LII (LENNOX INTERNATIONAL INC)
• FY2025 10-K: …the carrying value of the asset group exceeds the fair value of the asset group. Product Warranties For some of our heating, ventilation and air conditioning ("HVAC") products, we provide warranty terms ranging from 1 to 20 years to customers for certain components such as compressors or heat exchangers. For select…
• FY2025 10-K: …customers in the U.S. and Canada. AES manufactures curb, curb adapters, drop box diffusers and also offers HVAC recycling and salvage services, as well as focusing on multi-family HVAC replacement for expired mechanical assets. In the fourth quarter of 2025, we acquired Duro Dyne Buyer, Inc. ("Duro Dyne"), which…
• CARR (CARRIER GLOBAL CORPORATION)
• FY2025 10-K: …could adversely affect our business. • Demand for our HVAC products and services is influenced by weather conditions, seasonality, macroeconomic conditions and other factors. • Our business and financial performance depend on continued and substantial investments in our information and operational technology…
• FY2025 10-K: Climate Solutions Americas ("CSA"), Climate Solutions Europe ("CSE"), Climate Solutions Asia Pacific, Middle East & Africa ("CSAME") and Climate Solutions Transportation ("CST"). Each respective segment's major products, services and distribution methods are as follows: The Climate Solutions Americas, Climate…
• JCI (JOHNSON CONTROLS INTERNATIONAL PLC)
• FY2025 10-K: …maintenance, management, repair, retrofit and replacement of equipment (in the HVAC, industrial refrigeration, controls, security and fire-protection space) and energy-management consulting. The Company partners with customers by leveraging its broad product portfolio and digital capabilities, together with its…
• FY2025 10-K: …capitalize on these trends to enable delivery of sustainable, high-efficiency products and tailored services to enable customers to achieve their sustainability, heat management and energy efficiency goals. The Company is leveraging its install base, together with data-driven products and services, to offer…
• WTS (WATTS WATER TECHNOLOGIES INC)
• FY2025 10-K: …included in the APMEA segment. ​ On November 14, 2025, we completed the acquisition of Superior Boiler ("Superior") in an equity purchase transaction funded with cash on hand. The aggregate net purchase price was $88.7 million. Superior is headquartered in Hutchinson, Kansas, and is a designer and manufacturer of a…
• FY2025 10-K: …to water heaters, air conditioning, and appliance manufacturers. ​ Specialty. Approximately 21%, 19% and 19% of our net sales in 2025, 2024 and 2023, respectively, were through our specialty channel. The specialty channel primarily includes sales related to high-efficiency boilers and water heaters, water filtration…
• AOS (A. O. Smith Corporation)
• FY2025 10-K: …lines of residential and commercial gas and electric water heaters, boilers, heat pumps, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. Our Rest of World segment is primarily comprised of China, India, and Europe. NORTH AMERICA Sales in our…
• FY2025 10-K: …temperature and flow solutions and we believe it represents a compelling strategic fit and a meaningful advancement into our presence in the water management market. Leonard Valve is projected to contribute approximately $70 million in sales in 2026 in the North America segment. On November 1, 2024, we acquired…

Detection and Measurement (reported)

• MWA (MUELLER WATER PRODUCTS, INC.)
• FY2025 10-K: …to offer non-invasive leak detection and pipe condition assessment services is a key competitive advantage. With our Singer Valve and i2O products, we provide a range of intelligent water solutions including pressure control valves, advanced pressure management, network analytics, event management and data logging.…
• FY2025 10-K: …is in the process of transitioning from manually read meters to electronically read meters; however, we expect this transition to be relatively slow and that many end users will be reluctant to adopt brands other than their historically preferred brand. Our principal competitors in water metering products and systems…
• TDY (TELEDYNE TECHNOLOGIES INC)
• FY2025 10-K: …one acquisition which will be included within the Instrumentation segment. See Note 18 for additional information. Our Business Segments Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems. Additional financial information about our…
• FY2025 10-K: …that comprise the Instrumentation segment. Marine Instrumentation We offer a variety of products designed for use in harsh underwater environments, instruments that measure currents and other physical properties in the water column, systems that create acoustic images of objects beneath the water's surface, including…
• ITT (ITT INC.)
• FY2025 10-K: …We also record an allowance for individual accounts when we become aware of specific customer circumstances, such as in the case of bankruptcy filings or deterioration in the customer's operating results or financial position. The past due or delinquency status of a receivable is based on the contractual payment…
• FY2025 10-K: …controls at certain business units to determine the appropriate revenue recognition. • Performed site visits of certain business units across various geographies to perform revenue recognition testing and observe the Company's process, products, and arrangements. • Performed detail transaction testing of revenue…
• ROP (ROPER TECHNOLOGIES INC)
• FY2025 10-K: …testing the effectiveness of controls relating to the acquisition accounting, including controls over management's valuation of the customer relationships acquired. These procedures also included, among others (i) reading the purchase agreement; (ii) testing management's process for developing the fair value estimate…
• FY2025 10-K: …used in numerous identity access management applications across a variety of vertical markets. Verathon - medical devices that enable airway management, including bronchoscopes and video laryngoscopes, and bladder volume measurement solutions for healthcare providers. 6 Materials and Suppliers We believe most…
• FTV (Fortive Corp)
• FY2025 10-K: …requires significant judgment. Revenue from sales of hardware is recognized when control transfers to the customer, which is generally when the product is shipped. If any significant obligation to the customer with respect to a sales transaction remains to be fulfilled following 54 Table of Contents shipment…
• FY2025 10-K: …to remediate inspectional observations to the satisfaction of these regulatory authorities, and real or perceived efficacy or safety concerns or trends of adverse events with respect to our products (even after obtaining clearance for distribution) can lead to warning letters, notices to customers, declining sales,…
• DOV (DOVER Corp)
• FY2025 10-K: …of traditional and clean fuels (including liquefied natural gas, hydrogen, and electric vehicle charging), cryogenic gases, and other hazardous substances along the supply chain, and safe and efficient operation of convenience retail, retail fueling and vehicle wash establishments. • Imaging & Identification segment…
• FY2025 10-K: …and remote monitoring of clean and traditional fuels, cryogenic gases and other hazardous substances, as well as safe and efficient operation of convenience retail, retail fueling and vehicle wash establishments across the globe. Among solutions supplied by the segment are dispensing equipment and components for…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.