MDA Space (TSX:MDA) Valuation Check as RADARSAT+ Contracts and Debt Refinance Reshape Growth Outlook

MDA Space (TSX:MDA) just lined up two important pillars for its next chapter: fresh government work around RADARSAT and a C$250 million debt refinancing that reshapes its balance sheet for growth.

See our latest analysis for MDA Space.

The RADARSAT wins and debt reshuffle land as the stock recalibrates, with a 7 day share price return of 7.1% but a 1 year total shareholder return of minus 14.5%, following a powerful three year total shareholder return above 300% that signals longer term momentum is still very much intact even if sentiment has cooled recently.

If this kind of government backed space exposure has your attention, it could be worth exploring aerospace and defense stocks for other orbital and defense names riding similar structural tailwinds.

With revenue and earnings still growing double digits and the share price well below analyst targets, has MDA Space quietly slipped into undervalued territory, or is the market already baking in its next leg of growth?

Most Popular Narrative Narrative: 35.8% Undervalued

With the narrative fair value sitting well above MDA Space’s last close at CA$24.90, the story hinges on powerful multi year growth assumptions.

The ramp up of large LEO constellation contracts, including the landmark $1.8 billion EchoStar direct to device satellite order with options to expand, and multiple pipeline opportunities in broadband, defense, and IoT, is expected to drive robust multi year revenue growth as global demand for satellite connectivity accelerates.

Read the complete narrative.

Curious how that mega contract outlook turns into today’s fair value, despite moderated growth and margin expectations, and a higher future earnings multiple than the sector?

Result: Fair Value of $38.79 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on flawless execution. Mega constellation delays or underutilised new capacity could quickly pressure margins and dampen sentiment.

Find out about the key risks to this MDA Space narrative.

Another Angle on Valuation

Our DCF model paints a much cooler picture, suggesting fair value closer to CA$6.44, which would make MDA look expensive at today’s CA$24.90. Is the market correctly pricing near term cash flow risks, or underestimating MDA’s long term optionality?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out MDA Space for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 902 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own MDA Space Narrative

If you see things differently or want to dig into the numbers yourself, you can build a custom view in minutes. Do it your way.

A great starting point for your MDA Space research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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