TSAT - MDA: Growth Boosted By The Telesat Satellite Contract (Rating Upgrade)
2024-01-22 14:24:29 ET
Summary
- MDA's stock has appreciated by over 40% since September 2022 and has further room to progress given strategic expansion and acquisitions driving revenue growth.
- The company serves various sectors in the space industry, with satellite services experiencing the fastest growth.
- Looking at profitability in the capital-intensive space industry, MDA's erratic FCF margins can be misleading and, instead, it is better to assess the progression of sales to Capex ratio.
- The main risk is stock volatility caused by missing topline estimates in case of supply chain disruption after analysts raised expectations after the Canadian company notched the Telesat contract.
In my last article on MDA ( MDALF ) ( MDA:CA ) in September 2022, I had a Hold position, but, the stock which was trading at $5.8 at that time has since appreciated by more than 40% to $8.2. But, as shown in the chart below, it first bottomed to around $4....
MDA: Growth Boosted By The Telesat Satellite Contract (Rating Upgrade)