After an earnings miss, Maxar Technologies (TSX:MAXR)(NYSE:MAXR) provides new growth investors with extra value. The story of Maxar stock is a bumpy one, with investors falling in and out of love with the space tech ticker regularly and rapidly, leading to an uncommon amount of turbulence. However, it’s exactly this kind of momentum that appeals to one set of investors, while others remain bullishly calling for a long position.
It seems a season of largely missed expectations this time around, and sadly, Maxar falls into the same category as many other stocks at the moment. Space systems revenue dipped by 22.1%, leading to an immediate single-digit loss on the TSX. However, the company managed to net a profit of almost $150 million this time around. While that might sound like small potatoes in the big scheme of things, it definitely beats no potatoes. This time last year, the company made a loss of $40 million.
One stock to access an infinite growth industry
Also, it should be noted that the recent results included some encouraging signs. Services revenue was up 12.1%, for instance. Coupled with the fact that Maxar’s stock is up by over 80% since the previous quarter as well as key partnerships with government bodies of no lesser stature than NASA, and you have a long-term play worthy of the most skeptical aerospace investor. Sure, it’s not for everyone, but Maxar is the perfect stock for a space portfolio.
Indeed, after eyeing that meteoric rise on the TSX, there’s no reason why growth investors should steer clear of Maxar (other than that revenues miss, of course). In terms of value, the stock is still a long way off its all-time highs, having plotted a trajectory through the veritable asteroid field of disappointments that was the preceding 12 months of trading. A sell-off or another big contract could send the stock soaring — it’s entirely possible, as we’ve seen very recently.
To recap so far: Maxar is a key stock in a sector that could be worth trillions of dollars over the next couple of decades, with a large market share, trading well below its all-time high and offering huge upside potential. What’s not to like? With enough non-essential assets on its balance sheet to be able to kick off some ballast should the need arise, the room for improvement in this stock means that momentum investors have a smart play on their hands.
Even by looking at the past year’s performance on the TSX, a would-be investor in Maxar can see that the stock has bucked and kicked like a mule. Down from last year’s $70 range, the stock was in the doldrums at a pitiful year-long low barely higher than $5 a pop, only to double on good news. This means that if you’d bought at its lowest ebb, you would have made a significant profit. Even now, the stock is woefully beaten up and has room to reward similarly again.
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The bottom line
For exposure to the high-growth space sector at a knock-down price, it almost doesn’t make sense to not buy shares in Maxar. From satellite tech to the vast potential of space mining, Maxar is perfectly aligned to bring investors a lot of wealth, with auspicious signs that include attractive market ratios to the huge boost in share price that followed its recent deal with NASA.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Maxar is a recommendation of Stock Advisor Canada.