While many Canadian companies have reported better-than-expected earnings this season, some TSX stocks have notably failed. Space technology company Maxar Technologies (TSX: MAXR)(NYSE: MAXR) disappointed investors after notably falling short of analysts’ expectations in Q1 2021. MAXR stock plunged 26% on May 4. TSX stock Ballard Power Systems (TSX: BLDP)(NASDAQ: BLDP) fell 20% after reporting weaker Q1 earnings on May 3.
Maxar Technologies
Maxar reported muted revenue growth of 3% year over year and earned US$392 in sales. Its net loss expanded to US$84 million in Q1 2021 against a loss of US$48 million in Q1 2020. The results were negatively impacted by a failure of the SiriusXM satellite launched in December last year. The satellite was made by Maxar and was launched by SpaceX Falcon 9.
Apart from deteriorating financials, pushing key deadlines further of key projects also weighed on the stock. The company intends to launch its marker Worldview Legion satellite in Q4 this year, which was originally targeted to launch in September 2021. Worldview Legion is a group of next-gen, high-resolution earth observation satellites.
Maxar Technologies is a $2 billion space technology company that specializes in earth imagery and geospatial data analytics. It has a strong order book driven by government and non-government contracts. However, it has failed to translate that into strong operational and financial performance.
Amid all the letdowns, Maxar’s valuation could be an encouraging factor for investors. It is trading at a price-to-sales ratio of one. The recent correction has made it look all the more attractive from the valuation standpoint.
Ballard Power Systems
Ballard Power posted total revenues of US$17.6 million in Q1 2021 — a drop of 26% year over year. The company reported US$17.8 million net loss compared to US$13.1 million in Q1 2020.
Ballard Power is a $6 billion clean energy company that makes fuel cells used in buses, trucks, and marine applications. Fuel cells avoid the combustion of fossil fuels and convert hydrogen fuel into electricity.
Fuel cell stocks were flying high early this year. Ballard Power surged from $19 apiece in October last year to $54 in January 2021. However, disappointing quarterly results and waning exuberance brought the stock back to $20 levels this week.
With aggressive investments in clean energy and favourable policies, Ballard Power offers significant growth potential for the decade. However, the industry is still in the nascent stage, and consistent corporate profitability looks highly challenging at the moment.
So, where should long-term investors invest these days?
Air Canada (TSX: AC) will report its Q1 2021 earnings on May 7. The stock has largely been subdued for weeks even after the government announced a huge relief package for the flag carrier. Its upcoming earnings and management commentary will be crucial for the stock. Interestingly, lower cash burn and an operations ramp-up announcement could boost the stock.
AC stock has surged almost 10% so far this year. It is still trading 45% lower than its last year’s high of $52 a share. AC stock looks attractively valued at the moment and indicates room for growth. It could see notable recovery probably in the second half of 2021 and beyond as mobility restrictions wane and spending normalizes post-pandemic.
