MDA Space Ltd. (TSX:MDA) continues to demonstrate its ability to capitalize on the rapidly expanding space sector, posting massive top-line growth while maintaining a multi-billion dollar backlog. The company’s revenue in Q3 surged by 45% compared to last year, driven primarily by its satellite systems business, which saw sales climb from $167.6 million to $283.5 million. While reported net income dipped to $24.4 million from $29.5 million, the company’s adjusted earnings per share actually improved, signaling strong underlying operational performance.
Despite the strong growth, however, MDA’s stock is down around 23% this year.
But a long-term investment case can be made for MDA due to the potential explosive growth expected in the space economy, which is forecast to hit US$1.8 trillion over the next decade. As an established industry leader with a diversified portfolio spanning robotics, satellite systems, and geointelligence, MDA is well-positioned to ride these secular tailwinds.
The company currently boasts a backlog of $4.4 billion, providing investors with significant revenue visibility and a buffer against short-term economic uncertainty. This predictable cash flow is complemented by a healthy balance sheet that supports both organic growth and potential strategic acquisitions.
The stock currently trades at a price-to-earnings multiple of roughly 27, which may look attractive to those who believe the market has overly punished the stock for temporary headwinds. With its "proven flight heritage" and world-class manufacturing capabilities, MDA offers a rare combination of stability and high-growth potential in a promising sector.
If you’re willing to be patient and hang on for the long term, this can make for a solid buy despite its decline this year.
