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Buy MDA Space? Here’s what this analyst thinks

Beacon analyst Russell Stanley maintained his “Buy” rating on MDA Space (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA) after the company launched MDA Midnight, a guardian satellite system aimed at detecting, identifying and countering threats to critical space assets, saying the product strengthens MDA’s position in a growing defence market.

He also reiterated his $73.00 target.

In an April 13 report, Stanley said Midnight can also be used for on-orbit surveillance, asset relocation and satellite refuelling and argued the launch adds to an already expanding opportunity set. He noted that management said in March its sales pipeline had reached $40-billion, and said ongoing Midnight-related sales efforts represent upside to that figure.

Stanley said demand for guardian satellites is increasing as more countries move to develop their own systems. He pointed to plans in India, Germany and Japan, as well as broader concern around unusual satellite behaviour by China, as signs that defence-related demand for space monitoring and protection tools is likely to grow.

The analyst also said MDA’s valuation gap versus peers has widened despite a strong rally in the shares. Since Beacon initiated coverage in December, MDA’s projected 2027 Adjusted EBITDA multiple has expanded from 9x to 14x, but peers Intuitive Machines and RedWire have rerated much more sharply, leaving MDA trading at a 74% to 75% discount. Stanley said that remains difficult to justify given MDA’s more established financial profile and existing profitability.

In his view, better trading liquidity is still a key step toward narrowing that gap. He noted that trading volume has nearly tripled since late February on a 10-day average basis, helped in part by MDA’s recent NYSE listing. He also said MDA now has an estimated $547-million in cash and equivalents, with its $700-million revolver fully available, along with a $150-million accordion, giving it capacity for acquisitions.

Stanley added that possible catalysts include new contract wins, first-quarter results in May and M&A activity. He also said recent regulatory approval for Rocket Lab’s proposed acquisition of Mynaric in Germany improves confidence that European acquisitions remain feasible for space companies.

Stanley said MDA should generate Adjusted EBITDA of $334-million on revenue of $1.782-billion in fiscal 2026, improving to Adjusted EBITDA of $409-million on revenue of $2.016-billion in fiscal 2027.

 

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Tagged with: mda
Rod Weatherbie

Rod Weatherbie is a journalist based in Prince Edward Island. Since 2004, he has written extensively about the Canadian property and casualty insurance landscape. He was also a founder and contributing editor for a Toronto-based arts website and a PEI-based food magazine. His fiction and poetry have been featured in The Fiddlehead, The Antigonish Review, and Juniper.

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