Magellan Aerospace (MAL) AI Stock Analysis

• Market Cap: C$1.19B
• Dividend Yield: 0.93%
• Average Volume (3M): 30.49K
• Price to Earnings (P/E): 26.6
• Beta (1Y): 1.15
• Revenue Growth: 8.84%
• EPS Growth: 131.58%
• Country: CA
• Employees: 3,815
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.22
• Shares Outstanding: 57,079,056
• 10 Day Avg. Volume: 21,217
• 30 Day Avg. Volume: 30,489
• PEG Ratio: 0.06
• Price to Book (P/B): 0.72
• Price to Sales (P/S): 0.61
• P/FCF Ratio: 9.11
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: C$23.00 ▲(25.41% Upside)

Magellan Aerospace's stock score is driven by strong technical indicators and a stable financial position. The positive momentum and price trends are significant strengths. However, the high P/E ratio and challenges in cash flow management are notable risks that temper the overall score.

Positive Factors

Conservative leverage / strong balance sheet

A very low debt-to-equity ratio and strong equity base provide durable financial flexibility to fund multi-year aerospace programs, absorb cyclical downturns, and support capital expenditures or warranty/defense obligations without aggressive refinancing, strengthening long-term resilience.

Improving revenue and margins

Sustained revenue growth paired with rising gross and net margins signals better cost management and operational leverage. Improved margin structure across EBITDA/EBIT supports ability to fund investments and compete on complex assemblies over multiple program cycles, enhancing structural profitability.

Diversified aerospace revenue streams

Exposure across OEM, defense, aftermarket, and specialized manufacturing creates durable demand mix: defense and aftermarket smooth civil cyclicality, while specialized capabilities create higher barriers to entry and recurring service revenue, supporting steadier cash generation over time.

Negative Factors

Declining free cash flow growth

A near-25% drop in free cash flow growth materially weakens the company’s internal funding capacity. Over the medium term this can constrain capex, sustainment investments, or working-capital needs for program ramps and may increase reliance on external financing during downturns.

Low return on equity and moderate margins

ROE under 5% and only moderate margins suggest limited capital efficiency versus industrial peers. Persistently low returns make it harder to generate attractive shareholder value and may limit reinvestment capacity unless operational margins or asset turnover improve sustainably.

Revenue exposure to aircraft production cycles

Business tied to OEM build rates and program timing creates structural revenue volatility. Fluctuations in aircraft production, contract schedules or input-cost inflation can materially affect backlog conversion, capacity utilization, and margins across multi-quarter program cycles, raising execution risk.

Magellan Aerospace Business Overview & Revenue Model

Company Description

Magellan Aerospace (MAL) is a leading aerospace company based in Canada, specializing in advanced aerospace systems and solutions. The company operates across multiple sectors, including space, defense, and aviation, providing a wide range of products and services such as satellite systems, spacecraft, aerospace structures, and defense electronics. With a strong emphasis on innovation and technology, Magellan Aerospace serves both governmental and commercial clients, contributing to various high-profile projects in space exploration and national defense.

How the Company Makes Money

Magellan Aerospace generates revenue through a diverse array of business activities. Its primary revenue streams come from government contracts for defense and space projects, including contracts with agencies such as NASA and the Canadian Department of National Defence. Additionally, the company earns income from the design and manufacturing of aerospace components and systems, as well as providing engineering services and solutions to commercial clients in the aviation sector. Strategic partnerships with other aerospace and defense firms enhance its capabilities and market reach, while ongoing investments in research and development allow it to remain competitive and innovate within the aerospace industry.

Magellan Aerospace Financial Statement Overview

Summary

Magellan Aerospace shows a positive trajectory in revenue growth and improved profitability with better cost management. The company's stable financial health is reflected in its low leverage ratio. However, challenges remain in cash flow management, particularly in reversing the decline in free cash flow growth.

Income Statement

Magellan Aerospace shows a positive trajectory in revenue growth with a 3.3% increase in TTM. The company has improved its gross profit margin to 12.8% and net profit margin to 3.9%, indicating better cost management and profitability. EBIT and EBITDA margins have also seen improvements, reflecting operational efficiency. However, the margins are still moderate, suggesting room for further enhancement.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.11, indicating conservative leverage. Return on equity has improved to 4.8%, showcasing better utilization of equity. The equity ratio remains strong, suggesting a solid capital structure. However, the company should focus on further improving ROE to enhance shareholder value.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 23.8% in TTM, which is a concern. The operating cash flow to net income ratio is 0.44, indicating moderate cash generation from operations. Free cash flow to net income ratio is healthy at 0.63, but the negative growth trend in free cash flow needs attention to ensure liquidity and investment capacity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.01B	942.37M	879.62M	764.58M	688.36M	744.41M
Gross Profit	132.06M	107.89M	88.99M	35.06M	48.33M	96.49M
EBITDA	109.42M	96.39M	71.01M	31.54M	56.41M	74.93M
Net Income	44.74M	35.49M	9.25M	-21.69M	-977.00K	3.31M
Balance Sheet
Total Assets	1.19B	1.15B	1.03B	1.01B	1.00B	1.07B
Cash, Cash Equivalents and Short-Term Investments	72.00M	56.44M	1.49M	40.94M	32.48M	113.94M
Total Debt	93.34M	86.42M	73.45M	63.34M	67.77M	115.17M
Total Liabilities	362.02M	343.44M	287.66M	279.16M	237.99M	286.72M
Stockholders Equity	822.33M	799.44M	734.04M	728.35M	762.45M	782.50M
Cash Flow
Free Cash Flow	53.51M	63.19M	-41.56M	34.08M	-9.79M	79.98M
Operating Cash Flow	98.38M	99.29M	-17.30M	58.54M	12.53M	105.97M
Investing Cash Flow	-44.87M	-35.10M	-23.69M	-23.86M	-20.80M	-25.82M
Financing Cash Flow	-20.20M	-17.62M	1.01M	-26.27M	-73.01M	-35.73M

Magellan Aerospace Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 18.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MAL, the sentiment is Neutral. The current price of 18.34 is below the 20-day moving average (MA) of 21.58, below the 50-day MA of 19.10, and above the 200-day MA of 17.22, indicating a neutral trend. The MACD of 0.66 indicates Positive momentum. The RSI at 47.39 is Neutral, neither overbought nor oversold. The STOCH value of 11.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:MAL.

Magellan Aerospace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTG	78 Outperform	C$367.28M	27.58	17.40%	―	15.09%	31.55%
MAL	72 Outperform	C$1.19B	26.58	5.64%	0.93%	8.84%	131.58%
CAE	72 Outperform	$14.03B	32.04	9.00%	―	9.12%	―
MDA	70 Outperform	C$4.85B	42.76	8.88%	―	57.77%	57.55%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DPRO	52 Neutral	C$231.91M	-4.12	-48.13%	―	26.74%	53.14%

Magellan Aerospace Corporate Events

Magellan Aerospace Declares Quarterly Dividend Amid Strategic Growth Focus

Magellan Aerospace announced a quarterly cash dividend of $0.05 per share, reflecting the company’s ongoing commitment to balancing shareholder returns with financial flexibility and growth investments. This decision underscores Magellan’s strategic focus on maintaining robust financial health while supporting its growth initiatives, which is crucial for its positioning in the competitive aerospace industry.

The most recent analyst rating on (TSE:MAL) stock is a Hold with a C$18.50 price target. To see the full list of analyst forecasts on Magellan Aerospace stock, see the TSE:MAL Stock Forecast page.