MDA Ltd (MDA) AI Stock Analysis

• Market Cap: C$2.93B
• Dividend Yield: N/A
• Average Volume (3M): 560.39K
• Price to Earnings (P/E): 36.4
• Beta (1Y): 1.09
• Revenue Growth: 33.74%
• EPS Growth: 61.09%
• Country: CA
• Employees: 3,400
• Sector: Industrials
• Sector Strength: 63
• Industry: Aerospace & Defense
• EPS (TTM): 0.66
• Shares Outstanding: 122,094,590
• 10 Day Avg. Volume: 454,197
• 30 Day Avg. Volume: 560,389
• PEG Ratio: 0.60
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.16
• Price to Cash Flow (P/CF): 3.20
• P/FCF Ratio: 4.10
• 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: C$33.80
• Price Target Upside: 40.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

MDA Space's strong financial performance, strategic acquisitions, and robust contract wins underpin its solid position in the Aerospace & Defense industry. While the stock is currently trading at a high valuation, its growth prospects and improved financial metrics provide a positive outlook. Short-term technical indicators are mixed, but long-term trends remain favorable. The stock's overall score reflects these strengths and the potential for future success, tempered slightly by valuation concerns.

Positive Factors

Contract Wins

MDA disclosed a $1.1 billion contract with Globalstar for over 50 Aurora satellites, adding $750 million of incremental backlog.

Revenue Growth

FY2025 guidance for revenue and EBITDA is well above consensus, indicating strong expected growth.

Strategic Partnerships

MDA is expected to play a key role in the buildout of a new satellite constellation funded by Apple.

Negative Factors

Global Trade Concerns

The potential impact of U.S. tariffs on Canadian imports is uncertain, but it is viewed as manageable with some potential mitigating factors.

Market Risks

The potential impact of U.S. tariffs on Canadian imports remains uncertain, but is considered manageable due to MDA's non-U.S. backlog and other mitigating factors.

MDA Ltd Business Overview & Revenue Model

Company Description

MDA Ltd. designs, manufactures, and services space robotics, satellite systems and components, and intelligence systems in Canada, the United States, Europe, Asia, the Middle East, and internationally. It offers geointelligence solutions that provide satellite-generated imagery and analytic services to deliver critical and value-added insights in the areas of national security, climate change monitoring, and maritime surveillance. The company also provides robotics and space operations that enable humanity's exploration by providing autonomous robotics and vision sensors that operate in space and on the surfaces of the moon and mars. In addition, it offers satellite systems and spacecraft to enable space-based services, including space-based broadband internet connectivity from low earth orbit satellite constellations. Further, the company provides products and services of defense intelligence systems. It serves government agencies, prime contractors, and space companies. The company was formerly known as Neptune Acquisition Holdings Inc. and changed its name to MDA Ltd. in March 2021. MDA Ltd. was founded in 1969 and is headquartered in Brampton, Canada.

How the Company Makes Money

MDA Ltd makes money through a diverse revenue model that includes the sale of space robotics and satellite systems, providing geospatial data and intelligence services, and offering consultancy and support for space missions. Key revenue streams include government contracts, partnerships with commercial satellite operators, and collaborations with international space agencies. Additionally, MDA capitalizes on long-term service agreements for maintenance and operational support of its deployed systems, enhancing its earnings stability.

MDA Ltd Financial Statement Overview

Summary

MDA Ltd has shown impressive growth and financial improvement across all verticals. Revenue and profitability metrics have strengthened significantly, with margins improving consistently. Balance sheet health has improved with reduced leverage, though debt levels still warrant monitoring. Cash flow generation is robust, providing a solid financial cushion for future investments. Overall, the company is on a secure financial footing with a positive growth trajectory in the Aerospace & Defense sector.

Income Statement

MDA Ltd has demonstrated strong revenue growth with a steady increase from $295.6M in 2020 to $1.08B in 2024, showing a CAGR of over 38%. Gross profit margins have improved to 26.1% in 2024 from 11.4% in 2020, indicating enhanced operational efficiency. Net profit margin rose to 7.4% in 2024 from a negative margin in 2020, showcasing improved profitability. EBIT and EBITDA margins have also improved significantly, reflecting robust core operational performance.

Balance Sheet

The company's debt-to-equity ratio has decreased from 1.27 in 2020 to 0.12 in 2024, indicating a significant improvement in capital structure and leverage reduction. Return on equity (ROE) improved to 6.8% in 2024 from negative returns in earlier years, reflecting better profitability relative to shareholder equity. Equity ratio remained strong at 45.3% in 2024, highlighting a stable financial foundation. However, the total debt is still substantial, requiring ongoing attention.

Cash Flow

MDA Ltd's free cash flow turned positive with a substantial increase from negative $179.7M in 2023 to $614.8M in 2024, reflecting improved cash management and operational efficiency. Operating cash flow to net income ratio is exceptionally high at 10.27 in 2024, suggesting strong cash generation relative to reported profits. Free cash flow to net income ratio is also positive, indicating a robust cash flow position.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.08B	807.60M	641.20M	476.90M	295.60M
	Gross Profit
281.70M	244.00M	228.40M	167.80M	33.80M
	EBIT
106.80M	77.50M	74.60M	44.20M	-40.40M
	EBITDA
230.00M	154.00M	150.80M	124.00M	43.60M
	Net Income Common Stockholders
79.40M	48.80M	26.30M	2.90M	-17.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
166.70M	22.50M	39.30M	83.60M	78.60M
	Total Assets
2.60B	2.16B	1.75B	1.53B	1.46B
	Total Debt
136.80M	525.00M	251.90M	160.40M	580.20M
	Net Debt
-29.90M	502.50M	212.60M	76.80M	501.60M
	Total Liabilities
1.42B	1.10B	750.20M	572.90M	997.80M
	Stockholders Equity
1.18B	1.06B	1.00B	961.70M	457.40M
Cash Flow		Free Cash Flow
614.80M	-179.70M	-123.10M	-22.50M	43.10M
	Operating Cash Flow
815.60M	13.50M	57.00M	72.10M	56.40M
	Investing Cash Flow
-229.90M	-217.60M	-180.10M	-98.80M	-1.01B
	Financing Cash Flow
-436.10M	187.40M	78.80M	30.60M	1.03B

MDA Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MDA, the sentiment is Negative. The current price of 24.02 is below the 20-day moving average (MA) of 27.64, below the 50-day MA of 25.48, and above the 200-day MA of 21.54, indicating a neutral trend. The MACD of 0.66 indicates Positive momentum. The RSI at 47.58 is Neutral, neither overbought nor oversold. The STOCH value of 23.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MDA.

MDA Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDA	75 Outperform	C$2.93B	36.44	7.09%	―	33.74%	61.09%
Sector *	62 Neutral	$7.25B	12.39	3.08%	3.39%	3.63%	-14.32%
NEO	61 Neutral	C$328.32M	―	-3.15%	5.09%	-15.41%	-69.47%

MDA Ltd Corporate Events

MDA Space Acquires SatixFy to Boost Digital Satellite Offerings

MDA Space Ltd. has announced the acquisition of SatixFy Communications Ltd. in a deal valued at approximately US$193 million. This acquisition is expected to enhance MDA Space’s satellite systems offerings by integrating SatixFy’s advanced technology portfolio, which includes over 60 patents and a specialized technical team. The move aims to strengthen MDA Space’s position in the rapidly growing digital satellite communications market, driven by increasing demand for satellite-based broadband and IoT connectivity. The acquisition will also allow MDA Space to retire SatixFy’s existing debt, further solidifying its market position.

MDA Space Ltd. Schedules Q4 2024 Earnings Call for March 2025

MDA Space Ltd. announced it will release its fourth quarter and full year 2024 financial results on March 7, 2025, before market open. The company will hold a conference call and webcast on the same day to discuss these results, reflecting its commitment to transparency and stakeholder engagement. The announcement underscores MDA Space’s ongoing strategic positioning in the space industry and its focus on maintaining investor relations.

MDA Space Secures $1.1 Billion Contract with Globalstar for LEO Constellation

MDA Space Ltd. has signed a $1.1 billion contract with Globalstar Inc. to serve as the prime contractor for Globalstar’s next-generation low Earth orbit (LEO) satellite constellation. This significant contract will bolster MDA’s backlog by $750 million in fiscal 2025, enhancing its position in the global space industry and showcasing its expertise in software-defined digital satellites.