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MDA Ltd (TSE:MDA)
TSX:MDA
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MDA Ltd (MDA) AI Stock Analysis

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TSE:MDA

MDA Ltd

(TSX:MDA)

Rating:74Outperform
Price Target:
C$48.00
▲(16.36%Upside)
MDA Ltd's overall stock score is driven by strong financial performance and positive earnings call insights, despite technical analysis indicating potential overvaluation and short-term correction risks. The company's robust growth, financial health, and strategic initiatives position it well for future success in the aerospace and defense sector.
Positive Factors
Contract Wins
MDA disclosed a $1.1 billion contract with Globalstar for over 50 Aurora satellites, adding $750 million of incremental backlog.
Guidance
FY2025 guidance for revenue and EBITDA is well above consensus, indicating strong expected growth.
Valuation
The stock's valuation is considered attractive given MDA's strong backlog and pipeline.
Negative Factors
Tariffs
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 (MDA) vs. iShares MSCI Canada ETF (EWC)

MDA Ltd Business Overview & Revenue Model

Company DescriptionMDA 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 MoneyMDA Ltd generates revenue through a diverse range of streams, including the sale of specialized satellite and space systems, earth observation services, and engineering solutions for aerospace and defense applications. The company earns money by securing contracts with government agencies for defense and space exploration projects, as well as with commercial clients seeking satellite communication and data services. Key partnerships with industry leaders and government bodies also play a significant role in MDA's revenue generation, as they collaborate on large-scale projects and technology development initiatives to expand their market presence and enhance service offerings.

MDA Ltd Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 67.41%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue and profit growth, a strong contract backlog, and a solid financial position. However, concerns about potential NASA budget cuts affecting the Canadarm3 project and tariff issues present challenges. Despite these concerns, the reaffirmation of the 2025 financial outlook and strategic acquisition plans suggest a positive outlook.
Q1-2025 Updates
Positive Updates
Significant Revenue and Profit Growth
Q1 revenues totaled CAD 351 million, up 68% year-over-year; adjusted EBITDA was CAD 69 million, up 63% versus last year; and adjusted EBITDA margin was 19.5%.
Strong Backlog and Contract Wins
Backlog of CAD 4.8 billion, with significant enhancement from a CAD 1.1 billion follow-on contract from Globalstar for next-generation LEO constellation.
Positive Cash Flow and Financial Position
Operating cash flow was strong at CAD 267 million, ending the quarter with no debt and a net cash position of CAD 376 million.
Acquisition to Enhance Offerings
Entered into a definitive agreement to acquire SatixFy Communications Ltd. for USD 269 million, expected to enhance end-to-end Satellite Systems offering.
Reaffirmed 2025 Financial Outlook
Revenues expected to be between CAD 1.5 billion to CAD 1.65 billion, with adjusted EBITDA expected between CAD 290 million to CAD 320 million.
Negative Updates
NASA Budget Uncertainty
Concern over potential U.S. budget cuts affecting the Gateway project, part of the Artemis program, which may impact Canadarm3, despite current commitments from the Canadian Space Agency.
Steady GeoIntelligence Revenues
GeoIntelligence business revenues of CAD 52 million were flat year-over-year, reflecting steady but not growing work volumes.
Gross Margin Decline
Gross margin in Q1 was 22.7%, down from 27.7% in the same period of 2024, influenced by program mix and higher depreciation expenses.
Tariff Concerns
Ongoing U.S. and Canadian tariff negotiations could impact cost structures, though MDA Space perceives these as manageable.
Company Guidance
During the first quarter of 2025, MDA Space Ltd. reported strong financial performance, with revenues reaching CAD 351 million, marking a 68% increase year-over-year. The company's adjusted EBITDA rose to CAD 69 million, up 63% from the previous year, resulting in an adjusted EBITDA margin of 19.5%. Operating cash flow was robust at CAD 267 million, and the company ended the quarter with no debt and a net cash position of CAD 376 million. MDA Space reaffirmed its full-year 2025 financial outlook, projecting revenues between CAD 1.5 billion and CAD 1.65 billion and full-year adjusted EBITDA between CAD 290 million and CAD 320 million. The company also expects capital expenditures to range from CAD 210 million to CAD 240 million, while anticipating free cash flow to be neutral to positive for the year. MDA Space's backlog stood at CAD 4.8 billion, providing substantial revenue visibility beyond 2025, and the company continues to see momentum in its Satellite Systems business, bolstered by a CAD 1.1 billion contract with Globalstar for a next-generation low Earth orbit constellation.

MDA Ltd Financial Statement Overview

Summary
MDA Ltd displays impressive financial performance, with strong revenue growth, profitability, and cash flow generation. The income statement reveals a TTM revenue growth of 13.12%, robust gross profit margin of 24.83%, and a healthy net profit margin of 8.06%. The balance sheet shows low leverage with a debt-to-equity ratio of 0.11, and the cash flow statement highlights excellent liquidity with a 35.95% growth in free cash flow.
Income Statement
85
Very Positive
MDA Ltd has shown impressive revenue growth, with a TTM increase of 13.12% compared to the previous year. The gross profit margin has remained robust at 24.83%, indicating strong cost control. Net profit margin is healthy at 8.06%, reflecting efficient operations. The EBIT margin of 10.39% and EBITDA margin of 21.04% underscore solid operational performance. Overall, the income statement reflects strong growth and profitability in the aerospace and defense sector.
Balance Sheet
78
Positive
The balance sheet shows a strong equity base with a debt-to-equity ratio of 0.11, indicating low leverage risk. The return on equity is notable at 8.10%, showcasing effective use of equity capital. The equity ratio of 42.63% reflects a solid capital structure with a healthy proportion of equity financing. Overall, the balance sheet positions MDA Ltd for stable financial health and growth potential.
Cash Flow
90
Very Positive
MDA Ltd's cash flow is robust, with a remarkable free cash flow growth of 35.95% over the past year. The operating cash flow to net income ratio is an impressive 10.74, indicating strong cash generation relative to profits. The free cash flow to net income ratio stands at 8.48, highlighting efficient cash flow management. The cash flow statement demonstrates excellent liquidity and financial flexibility, supporting future growth initiatives.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.08B807.60M641.20M476.90M295.60M
Gross Profit281.70M244.00M228.40M167.80M33.80M
EBITDA230.00M154.00M150.80M124.00M43.60M
Net Income79.40M48.80M26.30M2.90M-17.30M
Balance Sheet
Total Assets2.60B2.16B1.75B1.53B1.46B
Cash, Cash Equivalents and Short-Term Investments166.70M22.50M39.30M83.60M78.60M
Total Debt136.80M525.00M251.90M160.40M580.20M
Total Liabilities1.42B1.10B750.20M572.90M997.80M
Stockholders Equity1.18B1.06B1.00B961.70M457.40M
Cash Flow
Free Cash Flow614.80M-179.70M-123.10M-22.50M43.10M
Operating Cash Flow815.60M13.50M57.00M72.10M56.40M
Investing Cash Flow-229.90M-217.60M-180.10M-98.80M-1.01B
Financing Cash Flow-436.10M187.40M78.80M30.60M1.03B

MDA Ltd Technical Analysis

Technical Analysis Sentiment
Positive
Last Price41.25
Price Trends
50DMA
32.61
Positive
100DMA
29.27
Positive
200DMA
27.38
Positive
Market Momentum
MACD
2.84
Negative
RSI
71.12
Negative
STOCH
52.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MDA, the sentiment is Positive. The current price of 41.25 is above the 20-day moving average (MA) of 38.58, above the 50-day MA of 32.61, and above the 200-day MA of 27.38, indicating a bullish trend. The MACD of 2.84 indicates Negative momentum. The RSI at 71.12 is Negative, neither overbought nor oversold. The STOCH value of 52.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MDA.

MDA Ltd Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
C$5.09B50.838.54%49.98%108.76%
65
Neutral
$11.08B15.705.19%2.15%3.13%-24.94%
$9.24B31.788.87%
$11.76B42.32
77
Outperform
C$285.56M19.9518.05%17.52%54.86%
73
Outperform
C$1.02B25.515.12%0.70%8.59%242.80%
68
Neutral
C$16.00B41.37-23.10%16.31%4.12%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:MDA
MDA Ltd
41.25
28.04
212.26%
CAE
CAE
28.69
11.04
62.55%
BDRBF
Bombardier
119.09
53.86
82.57%
TSE:BBD.A
Bombardier Cl A MV
161.58
71.17
78.72%
TSE:FTG
Firan Tech
11.61
5.23
81.97%
TSE:MAL
Magellan Aerospace
17.60
8.58
95.12%

MDA Ltd Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
MDA Space Appoints Rob Singh as VP of Strategic Solutions
Positive
Jul 21, 2025

MDA Space has appointed Rabindra (Rob) Singh as Vice President of Strategic Solutions, a new role aimed at driving strategic customer solutions and growth opportunities. With over 30 years of experience in the space industry, Singh’s appointment is expected to enhance MDA’s ability to meet customer demand and expand its presence in the global space economy.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

Financial Disclosures
MDA Space to Announce Q2 2025 Financial Results on August 7
Neutral
Jul 16, 2025

MDA Space announced it will release its second quarter 2025 financial results on August 7, 2025, before the market opens. The company will hold a conference call and webcast to discuss these results, providing stakeholders with insights into its financial performance and strategic direction. The webcast will be available on the MDA Space Investor Relations website for a year, allowing stakeholders to access the information at their convenience.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

Product-Related AnnouncementsBusiness Operations and Strategy
MDA Space Ltd. Leads SkyPhi Mission for 5G Satellite Communications
Positive
Jul 16, 2025

MDA Space Ltd. announced its leadership role in the SkyPhi mission, funded by the European Space Agency and the UK Space Agency, to develop regenerative 5G direct-to-device satellite communications from low Earth orbit. This initiative, part of the ARTES program, highlights the UK’s leadership in satellite innovation and involves collaboration with UK-based partners CGI and Open Cosmos. The project aims to enhance the UK’s competitive edge in the space sector by advancing satellite-enabled 5G services and strengthening the industrial base of the UK space industry.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
MDA Space Completes Acquisition of SatixFy Communications
Positive
Jul 2, 2025

MDA Space Ltd. has completed its acquisition of SatixFy Communications Ltd., a company specializing in next-generation satellite communication solutions. This acquisition enhances MDA Space’s satellite systems strategy and strengthens its competitive edge as the demand for digital satellite solutions grows. The integration of SatixFy’s operations and technology into MDA’s Satellite Systems business is expected to bolster the company’s offerings in the rapidly expanding global space market.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

Business Operations and Strategy
MDA Space Extends Maritime Surveillance Contract with Canadian Government
Positive
Jun 30, 2025

MDA Space Ltd. has announced an extension of its contract with Fisheries and Oceans Canada to provide satellite surveillance data and analytics for maritime security. This extension supports Canada’s leadership in maritime safety and aligns with international commitments to combat illegal fishing. The contract includes future use of MDA’s upcoming Earth observation constellation, CHORUS, enhancing Canada’s capabilities in monitoring and intercepting illegal maritime activities, thereby strengthening its Indo-Pacific Strategy.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

Business Operations and Strategy
MDA Space Secures $60 Million Contract for River-class Destroyer Program
Positive
Jun 24, 2025

MDA Space Ltd has secured a $60 million contract for the next phase of the River-class Destroyer program, focusing on the delivery and integration of sensor systems for the first three ships. These systems are designed to enhance situational awareness and protect against laser and optical guided threats, supporting the Royal Canadian Navy’s missions. The project is part of Canada’s National Shipbuilding Strategy, with Irving Shipbuilding Inc. constructing the ships and Lockheed Martin Canada leading the combat management system design.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

M&A TransactionsShareholder Meetings
MDA Space and SatixFy Amend Merger Agreement with Increased Offer
Positive
May 20, 2025

MDA Space Ltd. and SatixFy Communications Ltd. have amended their merger agreement, increasing the all-cash transaction offer to US$3.00 per ordinary share, valuing SatixFy at approximately US$280 million. This decision followed a competitive ‘go-shop’ process where SatixFy received a higher offer from a third party, leading to negotiations with MDA. The increased offer was deemed the best value for shareholders, with 57% of SatixFy shareholders already committed to supporting the revised merger agreement. The shareholder meeting to approve the merger has been postponed to allow for proper disclosure.

The most recent analyst rating on (TSE:MDA) stock is a Buy with a C$17.00 price target. To see the full list of analyst forecasts on MDA Ltd stock, see the TSE:MDA Stock Forecast page.

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
MDA Space Announces 2025 AGM Results and Strategic Decisions
Neutral
May 8, 2025

MDA Space announced the results of its 2025 Annual General Meeting, where 69.22% of common shares were represented. The meeting saw the election of nine directors, the appointment of KPMG LLP as the independent auditor, and approval of the company’s executive compensation approach. These decisions reflect MDA Space’s commitment to maintaining robust governance and operational transparency, potentially strengthening its position in the space industry.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
MDA Space Ltd. Reports Strong Q1 2025 Results and Strategic Acquisition
Positive
May 8, 2025

MDA Space Ltd. reported strong financial results for the first quarter of 2025, with a significant increase in revenue and backlog, driven by new contracts such as the Globalstar LEO constellation. The company achieved a 68% year-over-year revenue growth, reaching $351 million, and a 103% increase in adjusted net income. MDA Space’s strategic acquisition of SatixFy Communications is expected to enhance its satellite systems offerings, positioning the company well to capitalize on growing demand in the space industry. The reaffirmation of its 2025 financial outlook underscores its confidence in continued growth and market expansion.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
MDA Space Ltd. Reports Strong Q1 2025 Results and Strategic Expansion
Positive
May 8, 2025

MDA Space Ltd. reported a robust first quarter for 2025, with significant financial growth highlighted by a 46% increase in backlog and a 68% rise in revenues compared to the previous year. The company achieved an adjusted EBITDA of $68.6 million, marking a 63% year-over-year increase, and maintained a strong net cash position. Notably, MDA secured a major contract with Globalstar for its next-generation LEO constellation and announced the acquisition of SatixFy Communications, enhancing its satellite systems offerings. The company reaffirmed its positive financial outlook for 2025, anticipating continued growth driven by strategic initiatives and strong market demand.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 22, 2025