Metatek Group has a 151% upside, this analyst says

Beacon Securities analyst Russell Stanley notes that Metatek Group (Metatek-Group Stock Quote, Chart, News, Analysts, Financials TSX:MTEK) has started work on its largest project to date, though the later-than-expected start has reduced his Q2 forecast.

In a July 6 update, Stanley maintained his “Buy” rating and $9.00 target on Metatek.

Metatek announced it has begun data acquisition work and revenue recognition on a 210,000-line-kilometre project in Nigeria. Stanley said it is the company’s largest multi-year contract to date and its second multi-year project in the country, following work completed from 2022 to 2025.

The new project is expected to be completed in three phases over about two years, with the second phase scheduled for fiscal 2027.

Stanley lowered his Q2 revenue and Adjusted EBITDA forecast to $2.9-million and negative $100,000 from $6.6-million and $1.9-million, respectively, to reflect the delayed start.

“While the delay is a setback for the quarter, it relates to the company’s largest project to date, and the work represents repeat business, which we view very favourably,” Stanley said.

Stanley lowered his fiscal 2026 forecast to revenue of $34-million and Adjusted EBITDA of $14-million, but left his fiscal 2027 forecast unchanged at revenue of $60-million and Adjusted EBITDA of $26-million.

The analyst said fleet expansion remains a likely catalyst. Metatek currently has two systems in the field, with a third expected to return by early next year after refurbishments and upgrades. The company also plans to use part of its March IPO proceeds for down payments on a fourth and fifth system from Lockheed Martin.

Stanley said those purchases would expand Metatek’s system fleet and trigger the conversion of its right-of-first-refusal agreement into seven-year global exclusivity. Combined with long build times, he said that would give Metatek an effective moat of more than nine years.

Stanley also pointed to contract wins as a catalyst. Metatek exited Q1 with a $77-million backlog, up from $46-million in March and $22-million in December 2024.

The stock trades at 4.3 times Stanley’s fiscal 2027 Adjusted EBITDA forecast, an 81% discount to BlackSky Technology. It also trades at a 30% discount to its $5 .00 IPO price.

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