MDA Space. Buy, Sell, or Hold?

Beacon Securities analyst Russell Stanley reiterated a “Buy” rating and $50.00 target price on MDA Space (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA) in a Jan. 7 note, saying the stock already reflects investor concerns around a potential loss of Globalstar-related work that, in his view, now appear overdone.

Stanley said his investment thesis continues to rest on the view that MDA has largely priced in the feared loss of its roughly $1.1-billion contract with Globalstar following late-October media reports that SpaceX may seek to acquire Globalstar. Recent regulatory filings, he noted, reinforce Globalstar’s commitment to proceeding with its next-generation satellite constellation, for which MDA is the prime contractor.

From a valuation standpoint, Stanley said MDA’s discount to peers has widened further since Beacon initiated coverage in December…

In late December, Globalstar told the U.S. Federal Communications Commission that it plans to move ahead with more than $1-billion of investment in its C-3 satellite system, highlighting new technologies such as dynamic beamforming and higher-power transmissions that would expand its product and service offerings. Globalstar also reiterated its opposition to allowing SpaceX to use its licensed spectrum, urging regulators to preserve the exclusive MSS operating rights granted in a 2007 order. In a follow-up filing on Jan. 5, Globalstar again asked the FCC to deny SpaceX’s request to access its Big LEO band frequencies.

Stanley also pointed to strong industry fundamentals. Global launch activity set a record last year, with 329 launch attempts and more than 4,500 satellites deployed, up 58% year over year. Commercial operators accounted for about 70% of launches and 87% of satellites deployed, underscoring continued demand for satellite manufacturing and deployment services.

From a valuation standpoint, Stanley said MDA’s discount to peers has widened further since Beacon initiated coverage in December. The stock now trades at a 76% to 80% discount to closest comparables, as EV/2027E adjusted EBITDA multiples for peers such as Intuitive Machines and Redwire have expanded sharply. Applying peer multiples would imply a valuation range of roughly $93 to $113 per share for MDA, he said.

Stanley added that the technical picture has improved, with the stock recently breaking above its 21-day and 50-day moving averages. Potential catalysts include new contract wins, M&A activity, fourth-quarter results expected in early March and a possible U.S. exchange listing.

Beacon forecasts MDA will generate about $316-million in Adjusted EBITDA on $1.60-billion of revenue in fiscal 2025, improving to roughly $347-million on $1.79-billion of revenue in fiscal 2026.

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