I’ve been diving into MDA Space lately, and I think they might be one of the best-kept secrets in the market right now. If you haven’t heard of them yet, here’s a quick rundown on why I think they’re undervalued and why they could be a great investment opportunity.
MDA Space, traded on the Toronto Stock Exchange under the ticker MDA, is a key player in the space industry. They’re involved in everything from satellite technology to space robotics. Just last month they were awarded $1 billion CAD contract by the Canadian Space Agency for the next phases of the Canadarm3 program. It’s going to be the most advanced space robotics system ever built, designed to work on NASA’s Gateway—a space station planned to orbit the Moon as part of the Artemis program. The contract covers the final design and construction of this high-tech system, which includes both a large arm and a smaller, more precise one for various tasks.
So why should you care about MDA Space right now? Firstly, they’ve just reported a record backlog of $4.6 billion CAD. That’s up an incredible 318% from last year. This backlog represents future revenue and shows that they have a lot of business lined up, which is a great sign of things to come.
Their revenue for the last quarter was $242 million CAD, up 23% from the previous year. They also have a solid profit margin of 20.1%. This means they’re not just growing, but doing so in a profitable way. MDA Space also reported strong operating cash flow of $149 million CAD. Their balance sheet looks healthy with a net debt to EBITDA ratio of 2.0x, indicating they’re managing their debt well. They’re expecting to generate positive free cash flow in 2024, which is ahead of their original plan. This is a great sign of financial health and efficiency.
Here’s something to consider: MDA Space is traded on the Toronto Stock Exchange. This might be why it’s not as widely known or covered as some other stocks. The current market cap of MDA Space is around $1.7 billion CAD. Though the stock price did go up about 10% after reporting earnings last week, the price is still under the level that it was in May.
Given their impressive backlog, revenue growth, and strong financial performance, it seems like there’s a lot of potential for their stock price to rise as the market begins to recognize their value. The only downside that I see is that it is traded on the Toronto Stock Exchange.
Unless there is something else that I’m missing, this looks like an obvious winner. If their impressive fundamentals catch the market’s attention, we could see their stock price start to reflect their true potential.