MDA Space still has plenty of upside, this analyst says

Beacon Securities analyst Russell Stanley says recent defence contract wins and renewed investor attention on the space sector should support MDA Space (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA), which he continues to view as attractively valued.

In a June 12 update, Stanley reiterated his “Buy” rating and street-high $73.00 target on MDA.

“MDA has recently announced additional contract wins on the defence front, which we view positively,” Stanley said.

Stanley said broader space-sector attention could also increase as SpaceX begins trading, while MDA’s valuation remains compelling relative to other space names. He said MDA trades at 19 times his fiscal 2027 Adjusted EBITDA forecast, representing a 79% to 94% discount to Intuitive Machines and Redwire.

The analyst  noted that MDA has generated positive EBITDA and EPS every year since its 2021 IPO, while Redwire is only expected to turn EBITDA positive next year and Intuitive Machines is only expected to become EPS positive in fiscal 2027.

Stanley said company-specific catalysts could include additional contract wins, acquisitions supported by more than $1.2-billion in liquidity and second-quarter results in August.

On June 12, MDA confirmed that the U.S. Air Force renewed its long-term contract for Global Procedure Designer through an indefinite-delivery, indefinite-quantity contract with a ceiling value of US$43-million through June 2031. The sale was completed by the Canadian Commercial Corporation on behalf of 49North, MDA’s defence-focused business.

Stanley said 49North was established earlier this year to pursue domestic defence opportunities outside space, including secure multi-domain C4ISR capabilities.

MDA also recently announced it was selected to design and build antennas and control electronics for medium Earth orbit satellites being built by BAE Systems for the U.S. Space Systems Command EPOCH 2 Constellation Program, focused on warning and tracking advanced ballistic and hypersonic weapons.

Stanley said the BAE win shows MDA continues to have a strong subcontractor business, even as it pursues prime contractor work with customers including Telesat and Globalstar.

Stanley expects MDA to generate Adjusted EBITDA of $343-million on revenue of $1.80-billion in fiscal 2026, improving to Adjusted EBITDA of $409-million on revenue of $2.04-billion in fiscal 2027.

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