Major Drilling (MDI) AI Stock Analysis

• Market Cap: C$1.36B
• Dividend Yield: N/A
• Average Volume (3M): 198.85K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.89
• Revenue Growth: 20.42%
• EPS Growth: -61.80%
• Country: CA
• Employees: 2,500
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): -0.13
• Shares Outstanding: 82,134,285
• 10 Day Avg. Volume: 215,040
• 30 Day Avg. Volume: 198,852
• PEG Ratio: -0.51
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 20.45
• 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$20.50
• Price Target Upside: 23.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.37
• Revenue Forecast (FY): C$873.95M

• Rating: 64 Neutral
• Price Target: C$19.50 ▲(17.90% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

Overall score reflects a strong balance sheet and still-solid cash generation, tempered by a clear TTM margin/profitability deterioration. Technicals remain bullish but appear overextended (high RSI/Stoch), while valuation is the largest negative due to the very high P/E. Earnings call commentary supports a recovery in activity and pricing, but near-term margin headwinds remain a key risk.

Positive Factors

Conservative balance sheet

Very low leverage and a large equity base give the company durable financial flexibility. This supports weathering cyclicality, funding modest fleet modernization and working capital needs, and pursuing opportunistic contract bids without forcing distressed asset sales or large refinancing.

Solid cash generation & liquidity

Consistent positive operating and free cash flow, plus material FCF growth, underpin the firm's ability to fund fleet upkeep, pre-order supplies and retain crews ahead of an activity upswing. Strong cash conversion capacity provides resilience through multi‑quarter demand swings.

Fleet readiness and specialized mix

A modernized, optimized fleet and proactive inventory/maintenance increase available capacity and speed to market as exploration budgets rise. High specialized-service exposure positions the company to capture complex, higher-value contracts over a sustained industry upswing.

Negative Factors

Material margin compression

A large drop in gross and EBITDA margins signals persistent pricing, mix or cost pressures that erode earnings quality. Even with revenue growth, lower margins reduce free cash flow and ROE, meaning profitability recovery may lag revenue for multiple quarters.

Labor availability pressure

Crew shortages raise wage and retention costs and limit the pace of ramping rigs despite demand. Structural tightness in skilled drilling labor can cap utilization and force higher per‑project costs for months, constraining margin recovery even as activity improves.

Regional slowdowns & contract terminations

Geographic pockets of weakness and contract terminations create revenue volatility and one-off margin hits. Exposure to uneven regional demand and reliance on a few large customers can prolong recovery in affected markets and increase execution risk over the coming quarters.

Major Drilling Business Overview & Revenue Model

Company Description

Major Drilling Group International Inc. provides contract drilling services for mining and mineral exploration companies. The company offers a suite of drilling services, including surface and underground coring, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive, longhole drilling, surface drill and blast, and related mining services. The company was founded in 1980 and is based in Moncton, Canada with additional offices in Mexico, South America, Asia, Africa, USA, and Australia.

How the Company Makes Money

Major Drilling generates revenue primarily through its drilling services, which are billed on a contract basis. The company's key revenue streams include the provision of surface and underground drilling services, as well as specialized drilling techniques tailored to the specific needs of clients in the mining sector. MDI's earnings are influenced by factors such as commodity prices, exploration budgets, and mining activity levels, which fluctuate based on market demand. Additionally, significant partnerships with major mining companies and long-term contracts contribute to stable revenue generation. The company's focus on expanding its service offerings and geographic reach also plays a crucial role in enhancing its earnings potential.

Major Drilling Financial Statement Overview

Summary

Strong balance sheet with low leverage (TTM debt-to-equity ~0.08) and solid liquidity supports resilience. Cash flow remains positive with strong operating cash flow and positive free cash flow, but cash conversion/coverage weakened. The main drag is the TTM profitability step-down—gross, EBIT/EBITDA, and net margins have compressed meaningfully despite strong revenue growth.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up strongly (about +292%), but profitability has compressed versus recent annual results: gross margin fell to ~16% (from ~21% in FY2024–FY2025) and net margin declined to ~2% (from ~7–8%). EBIT and EBITDA margins also stepped down meaningfully, signaling weaker pricing, mix, or cost pressure. While the company remains profitable, earnings quality looks less robust in the latest period.

Balance Sheet

The balance sheet is conservatively positioned with low leverage (TTM debt-to-equity ~0.08) and a large equity base (equity ~C$544M vs. debt ~C$42M). Total assets have grown steadily, and overall financial risk from debt appears manageable. The main weakness is return on equity trending lower in TTM (~3%) versus stronger levels in earlier years, reflecting reduced profitability rather than balance-sheet strain.

Cash Flow

Cash generation remains solid: TTM operating cash flow is strong (~C$84M) and free cash flow is positive (~C$29M) with sizable free-cash-flow growth (~+46%). However, cash conversion is mixed—free cash flow is only ~26% of net income in TTM, and operating cash flow coverage is weaker in TTM (~0.50) compared with FY2025 (~1.11). This suggests higher working-capital needs and/or elevated reinvestment that can add volatility to near-term cash outcomes.

Breakdown	TTM	Apr 2024	Apr 2022	Apr 2021	Apr 2020	Apr 2019
Income Statement
Total Revenue	842.93M	727.58M	735.74M	650.41M	432.08M	409.14M
Gross Profit	125.52M	130.54M	176.90M	139.77M	64.09M	60.64M
EBITDA	96.14M	102.54M	145.05M	114.09M	52.05M	-14.90M
Net Income	14.20M	25.95M	74.92M	53.46M	10.03M	-70.96M
Balance Sheet
Total Assets	734.61M	718.74M	611.68M	557.08M	388.53M	425.92M
Cash, Cash Equivalents and Short-Term Investments	88.65M	45.99M	94.43M	71.26M	22.36M	58.43M
Total Debt	41.76M	37.13M	25.55M	55.39M	19.21M	55.18M
Total Liabilities	190.98M	196.64M	159.11M	197.32M	108.37M	128.87M
Stockholders Equity	543.63M	522.10M	452.58M	359.76M	280.16M	297.05M
Cash Flow
Free Cash Flow	29.29M	28.39M	54.50M	44.93M	3.15M	10.07M
Operating Cash Flow	84.44M	100.92M	113.19M	94.87M	34.45M	42.11M
Investing Cash Flow	-53.52M	-178.03M	-63.98M	-85.84M	-29.38M	-44.73M
Financing Cash Flow	-1.97M	25.92M	-29.61M	38.25M	-37.23M	32.64M

Major Drilling Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 16.54
• 50DMA: Positive
• 100DMA: Positive
• 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:MDI, the sentiment is Neutral. The current price of 16.54 is below the 20-day moving average (MA) of 17.08, above the 50-day MA of 15.47, and above the 200-day MA of 11.78, indicating a neutral trend. The MACD of 0.58 indicates Positive momentum. The RSI at 48.69 is Neutral, neither overbought nor oversold. The STOCH value of 30.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:MDI.

Major Drilling Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDI	64 Neutral	C$1.36B	-28.22	3.86%	―	20.42%	-61.80%
OGD	64 Neutral	C$85.44M	10.45	7.13%	―	1.04%	107.55%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
FAR	61 Neutral	C$294.59M	10.86	18.35%	―	-17.73%	-36.29%
GEO	57 Neutral	C$156.91M	-91.55	7.68%	―	25.76%	15.68%
FVL	56 Neutral	C$829.54M	-1,156.86	-0.62%	―	―	41.18%
GQC	48 Neutral	C$882.38M	-30.84	-38.72%	―	―	-130.77%

Major Drilling Corporate Events

Major Drilling Ramps Up for Robust 2026 Despite Quarterly Loss

Major Drilling reported third-quarter fiscal 2026 revenue of $184.6 million, a 14.9% increase from a year earlier, but posted a net loss of $10.8 million as margins were pressured by strategic spending. The company ended the quarter with $39.6 million in net cash and total liquidity of $177.1 million, while continuing to modernize its fleet through targeted capital expenditures and the retirement of older drills.

Management said the outlook for calendar 2026 remains robust, pointing to record-high commodity prices, a surge in equity financing for TSX and TSX-V listed mining companies and sharply higher exploration budgets from senior miners. Major Drilling is investing ahead of anticipated demand by retaining and hiring crews, securing supplies and enhancing equipment availability, though it expects labour constraints to be a key headwind even as higher pricing and deployment of rigs drive phased revenue growth and gradual margin improvement.

The firm also highlighted regional growth opportunities, with the strongest increases in exploration spending expected in Canada and the U.S., followed by more gradual gains elsewhere. In governance developments, Major Drilling appointed veteran geologist and mining executive Shannon McCrae to its board of directors, adding deep industry and exploration expertise as the company prepares for a more active drilling cycle.

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