How will the SpaceX IPO affect MDA Space?

Is MDA Space set to rocket?

Beacon Securities analyst Russell Stanley said MDA Space (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA) has strengthened its balance sheet and improved its strategic flexibility following the completion of a $250-million private placement, while broader policy and industry developments continue to support the long-term investment case.

MDA recently closed the previously announced private placement of 7.0% senior unsecured notes due 2030, with proceeds used to refinance borrowings under its credit facility. Earlier in December, the company also expanded its revolving credit facility by adding a $150-million accordion to its existing $700-million revolver and extended the maturity date from April 2027 to November 2030.

“Our balance sheet estimates reflect the closing and assume the full $290-million in principal outstanding on the revolver is paid down,” Stanley said. “We view the financing positively, as it demonstrates the company’s creditworthiness and provides additional balance sheet flexibility to support organic growth and M&A.”

Stanley initiated coverage of MDA on December 10 with a “Buy” rating and a $50.00 target price, which he reiterated in his latest commentary.

On the policy front, Stanley pointed to a recent executive order from U.S. President Donald Trump titled Ensuring American Space Superiority, which mandates a 2028 lunar landing and calls for the development of a nuclear reactor capable of deployment to the Moon, along with the establishment of initial elements of a permanent lunar outpost by 2030. The order also targets at least US$50-billion of additional investment in U.S. space markets by 2028 and confirms plans to retire the International Space Station by 2030.

“We believe these objectives will create additional market opportunities for MDA,” Stanley said.

Industry attention has also been heightened by growing expectations that SpaceX could pursue an initial public offering as early as 2026. Stanley noted that recent employee share sales imply a valuation of roughly US$800-billion, doubling the company’s valuation from mid-2025. Based on Elon Musk’s projection that SpaceX would generate about $15.5-billion in revenue in fiscal 2025, that valuation implies a sales multiple of roughly 50 times.

Bloomberg has reported that SpaceX could target a US$30-billion IPO at a valuation of about US$1.5-trillion, which would exceed Saudi Aramco’s US$29-billion IPO in 2019 and imply a roughly 65-times sales multiple on projected fiscal 2026 revenue.

“We believe expectations of a SpaceX IPO will continue drawing investor interest in space, which should support continued multiple strength,” Stanley said.

Stanley forecasts MDA will generate $316-million in adjusted EBITDA on revenue of $1.60-billion in fiscal 2025, increasing to $347-million on revenue of $1.79-billion in fiscal 2026.

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