Is MDA Space (TSX:MDA) still a buy?

Beacon Securities analyst Russell Stanley says MDA Space’s (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA) latest contract win supports management’s view that its expanding geographic footprint can increase its addressable market.

In a July 21 update, Stanley maintained his “Buy” rating and $88.00 target on MDA.

MDA announced that its U.K. subsidiary was selected by OHB System AG to provide lunar landing sensors for the European Space Agency’s Argonaut spacecraft.

“While we expect the contract value to be modest and our estimates are unchanged, we view the win positively, particularly as evidence that MDA’s expanding geographic footprint will produce the TAM expansion management recently spoke to,” Stanley said.

MDA received a pre-authorization to proceed contract from OHB, allowing it to begin engineering work and procure long-lead items ahead of an expected full contract. Under the full agreement, MDA is expected to supply two flight units of its LEIA LiDAR sensor for Argonaut’s first mission to the Moon.

The sensor will support the spacecraft’s hazard detection and avoidance system, generating real-time terrain maps regardless of lighting conditions and helping the lander avoid craters, boulders and rough terrain. Stanley said LEIA’s small, low-mass design and prior selection for commercial lunar missions give MDA an edge over new entrants.

“Moreover, the endorsement from UK Space Minister Liz Lloyd demonstrates the value of having a production presence in the UK,” Stanley said.

The analyst said that supports the strategic rationale behind MDA’s planned acquisitions of Blue Canyon in the U.S. and CLS in France.

The Argonaut program is expected to be Europe’s first independent lunar landing effort. The European Space Agency says each lander will autonomously deliver up to 1,500 kilograms of cargo to the lunar surface, with the first mission targeted before the end of 2030.

Stanley said the full Lunar Descent Element contract was announced by prime contractor Thales Alenia Space at about US$900-million earlier this year, meaning MDA’s contract is likely modest but still strategically positive.

MDA trades at 15 times Stanley’s fiscal 2027 Adjusted EBITDA forecast, a 71% discount to Intuitive Machines and a 93% discount to Redwire. Potential catalysts include further contract wins, Q2 results in early August and progress toward closing the Blue Canyon and CLS acquisitions.

Stanley expects MDA to generate Adjusted EBITDA of $343-million on revenue of $1.80-billion in fiscal 2026, improving to Adjusted EBITDA of $562-million on revenue of $2.82-billion in fiscal 2027.

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