SPX Technologies Stock Trades at 44 Times Earnings, Does the Data Center Growth Justify It

Key Stats for SPX Technologies Stock

• 52-Week Range: $169 to $251
• Current Price: $227.82
• Street Target Price: around $270
• TIKR Model Target: around $275 (mid case, realized end of 2030)
• Potential Total Return: around 21%
• Annualized Return: around 4% per year
• Q1 2026 Revenue: $566.8 million, up 17% year over year
• Q1 2026 Adjusted EPS: $1.69, up 23%
• HVAC Segment Backlog: up 38% organically, driven by data center orders

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Revenue Grew From $1.2 Billion to $2.3 Billion in Four Years, and Q1 Kept the Pace

SPX Technologies (SPXC) has nearly doubled its revenue since 2021, growing from $1.2 billion to $2.3 billion by the end of 2025. That kind of multi-year acceleration usually comes from one big catalyst, and for SPX it’s been a combination of steady acquisitions layered onto organic growth in its HVAC and Detection & Measurement segments.

SPX Technologies Total Revenues. (TIKR)

The first quarter of 2026 extended that pattern. Revenue came in at $566.8 million, up 17% year over year, with about 7% of that growth organic and the rest coming from recent acquisitions, including Thermolec and Crawford United.

The more interesting number sits inside the HVAC segment, where management pointed to rising data center cooling demand as a real driver, not just a talking point. Backlog in that segment grew 38% organically to $755 million, and the company raised its full-year data center revenue target for 2026, lifting it from an original $200 million estimate to $350 million.

CEO Gene Lowe described a robust pipeline of acquisition opportunities alongside organic growth, suggesting the deal-driven side of the story isn’t slowing down either.

Track SPX Technologies stock’s data center backlog and HVAC revenue growth as the Q2 print approaches. Follow SPXC on TIKR for free →

Gross Margins Climbed From 36% to 41%, But One Segment’s Margin Just Slipped

Consolidated gross margin has expanded steadily, moving from around 36% in 2021 to around 41% by 2025. That’s a meaningful improvement, and it reflects a business getting more profitable as it scales, not just growing revenue for its own sake.

SPX Technologies Gross Margins. (TIKR)

The first quarter complicates that story slightly, and it’s worth addressing directly rather than smoothing over. HVAC segment income margin actually declined by 40 basis points year over year, even as HVAC revenue grew 22%.

Management attributed the dip to start-up costs tied to the company’s ongoing capacity expansion, including a roughly $100 million investment SPX is making to expand production capacity to meet data center cooling demand.

Meanwhile, the Detection & Measurement segment moved in the opposite direction, with segment margin up 410 basis points on a more favorable product mix. At the consolidated level, adjusted EBITDA margin still expanded to around 22% from around 21% a year earlier, so the overall trend remains positive.

The HVAC dip is a real cost of growth, not a sign that the underlying economics are deteriorating, but it’s a detail worth watching as the capacity expansion continues through the rest of the year.

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TIKR’s Model Points to Just Under 4% Annualized Returns, Here’s Why the Bar Is Higher Now

TIKR’s mid-case model targets SPX Technologies at around $275 by the end of 2030, implying a total return of around 21% and an annualized return of just under 4%. That’s a modest figure next to SPX’s own recent history. The stock’s one-year IRR is 34%, and its five- and ten-year IRRs are around 30% per year.

The model isn’t suggesting the business is slowing. It suggests the valuation has already priced in much of the growth.

SPX Technologies Valuation Model. (TIKR)

The mid-case assumptions themselves are reasonable on their face: revenue growth of around 6% a year, well below the 14% pace SPX posted over the past year, alongside net income margin expanding to around 16%.

The gap between that modest revenue assumption and the company’s actual recent growth rate is deliberate. It reflects an expectation that the current data center-driven pace of acceleration and acquisition won’t continue indefinitely.

On top of that, the model assumes a mild contraction in the price-to-earnings multiple, since SPX already trades at around 44 times trailing earnings today, a premium that leaves less room for further multiple expansion even if the business keeps executing.

The Street’s own consensus target of around $270 sits close to TIKR’s model, which suggests both frameworks broadly agree the stock is fairly valued rather than deeply mispriced in either direction.

Should You Invest in SPX Technologies Stock

SPX Technologies is executing well on a genuine growth opportunity in data center cooling, and the numbers back that up, not just the narrative around it. The risk isn’t the business, it’s the price investors are already paying for that growth.

With the stock trading at a premium multiple and TIKR’s model pointing to a more modest annualized return than SPX has historically delivered, this looks like a name where the quality of the business and the attractiveness of the entry point have begun to diverge.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!