MDA Space (TSX:MDA): Valuation in Focus After Winning Canadian Space Domain Awareness Contract

MDA Space (TSX:MDA) has been selected, along with ThothX Group, to deliver enhanced space domain awareness services to Canada’s Department of National Defence. This new contract highlights MDA Space’s continued presence in the space surveillance sector.

See our latest analysis for MDA Space.

MDA Space’s latest contract builds on a year marked by modest but steady progress. The company’s 1-year total shareholder return sits just below 1%, reflecting a measured response from the market despite ongoing operational momentum and sector leadership. While the latest announcement showcases MDA Space’s growing relevance in the commercial space domain awareness market, overall market enthusiasm for the stock has so far been more restrained, suggesting investors are still weighing long-term growth potential against near-term risks.

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With shares trading nearly 21% below analyst targets and strong revenue and income growth in the past year, the question now is clear: is this a buying opportunity for MDA Space, or has the market already factored in its future growth?

Most Popular Narrative: 19.8% Undervalued

MDA Space’s last close of CA$35.34 stands below the narrative’s fair value estimate, setting up a bold outlook for further upside. The most widely followed narrative, according to IndusyHoldings, anticipates significant industry tailwinds and multi-year profit growth, positioning the company for substantial re-rating if assumptions hold true.

MDA Space can benefit greatly from the tailwind of the industry as they offer a wide product range that includes LEO and MEO satellites, space robots and space rovers. The company has partnerships with OHB System AG, Huber+Suhner and ThermAvant Technologies.

Read the complete narrative.

Ever wondered what kind of future profit margins and top-line expansion could justify this lofty fair value? This narrative hints at an aggressive industry growth rate along with ambitious product diversification. If you want the numbers and projections powering this call, you don’t want to miss the details.

Result: Fair Value of $44.08 (UNDERVALUED)

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

However, delays in government projects or shifts in global trade policy could challenge MDA Space's revenue assumptions and future growth outlook.

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

Another View: The Market’s Multiple

Taking a different tack, the market’s main valuation yardstick here is the price-to-earnings ratio. At 38.8x, MDA Space trades higher than both the North American industry average of 37.6x and its peers’ average of 28.8x, and also above the fair ratio of 32.3x. This suggests the current share price already bakes in plenty of optimism, raising the stakes: how durable is that premium if expectations reset?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own MDA Space Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft your own narrative in just a few minutes. Do it your way

A great starting point for your MDA Space research is our analysis highlighting 3 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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