Beaten down Metatek Group is a buy, this analyst says

Beacon Securities analyst Russell Stanley says Metatek Group (Metatek-Group Stock Quote, Chart, News, Analysts, Financials TSX:MTEK) could be particularly catalyst-rich over the next two months, with the stock trading below its March IPO price despite several near-term opportunities.

In the June 4 report, Stanley noted Metatek shares closed at a new low, representing a 17% discount to the company’s $5.00 IPO price. Beacon initiated coverage of the stock on April 24.

Stanley noted that Metatek trades at 5.4 times his fiscal 2027 Adjusted EBITDA forecast of $26-million, an 80%-plus discount to BlackSky’s 30-times multiple. He said the company’s three systems expected to be deployed by early fiscal 2027 could generate up to $38-million in Adjusted EBITDA at full capacity.

One potential catalyst is the finalization of initial deposits on Metatek’s fourth and fifth systems. The company currently has two systems in the field, while its iFTG system is expected to rejoin the fleet as a third system by early fiscal 2027.

The fourth and fifth systems, both eFTGs, would trigger the conversion of Metatek’s supplier relationship with Lockheed Martin from a right of first refusal to a seven-year global exclusivity agreement. Stanley expects those systems to enter service in fiscal 2028 and said that, at full capacity, they could generate annual revenue and Adjusted EBITDA of $125-million and $63-million, respectively.

“Between the proceeds from the IPO and expected operating cash flow, we believe MTEK is fully financed through to five systems,” Stanley said.

Contract wins could provide another catalyst. Metatek’s backlog was $77-million as of March 31, up 67% during March and up 250% from December 2024. March orders included a $20-million contract from a repeat customer in West Africa, highlighting both the size of the company’s contracts and its ability to win repeat business.

Stanley also expects Q2 results to show a sequential improvement. After Q1 revenue and Adjusted EBITDA of $4.1-million and $400,000, respectively, he is forecasting Q2 revenue of $6.6-million and Adjusted EBITDA of $1.9-million, helped by seasonal improvement and the redeployment of the dFTG system.

Stanley expects Metatek to generate Adjusted EBITDA of $16-million on revenue of $38-million in fiscal 2026, improving to Adjusted EBITDA of $26-million on revenue of $60-million in fiscal 2027.

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