Prediction: 3 Reasons This Canadian Space Tech Stock Will Soar in 2025

Currently trading with a solid 146% year-to-date gain in 2024, MDA stock could deliver even better returns in 2025.

| More on:
Rocket lift off through the clouds

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Canadian space tech industry is quietly becoming one of the most exciting sectors for growth-oriented investors. With global demand for satellite technology, space exploration, and communication infrastructure on the rise, companies in this sector are showing huge upside potential.

MDA Space (TSX:MDA), the Toronto-based global space firm, could be a good example of a top player in the international space race. With a market cap of $3.4 billion, MDA stock currently trades at $20.39 per share with an outstanding 146% year-to-date gain. As we look ahead to 2025, several factors could propel the stock to even greater heights. In this article, I’ll highlight the top three fundamental reasons why MDA stock could continue its strong momentum into 2025.

The first main reason MDA stock could continue soaring in 2025 is the ongoing strength in its financial growth trends. In the latest quarter ended in September 2024, the company posted a solid 38% YoY (year-over-year) rise in its total revenue to $282.4 million with the help of higher work volumes across its core business operations, especially in Satellite Systems and Robotics & Space segments.

MDA’s Satellite Systems segment stood out, with a remarkable 77.5% YoY increase in revenue to $167.6 million, fueled by major programs like the Telesat Lightspeed project and contracts for non-geostationary satellite constellations.

On the profitability side, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed by 30% from a year ago to $55.5 million with the help of higher revenue and a favourable program mix. This figure translated into an adjusted EBITDA margin of 19.7% for the third quarter, which aligns with the company’s full-year guidance range of 19-20%.

Created with Highcharts 11.4.3Mda Space PriceZoom1M3M6MYTD1Y5Y10YALL7 Apr 20213 Apr 2025Zoom ▾Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520222022202320232024202420252025010203040www.fool.ca

Increasing backlog

The second reason MDA stock is likely to soar in 2025 is its expanding backlog, which could be a strong sign of its future growth. At the end of the September 2024 quarter, the company had a backlog of $4.6 billion, reflecting an outstanding 49% YoY increase.

Interestingly, a large portion of this backlog is driven by high-value, long-term contracts, such as the $1 billion Canadarm3 project for NASA’s Lunar Gateway. These factors not only provide it with clear revenue visibility but also highlight the strong demand for MDA’s cutting-edge space technology and solutions.

Continued investments in growth initiatives

Another important factor that could help MDA stock surge in 2025 and beyond is its continued focus on strategic investments and scaling its operations further to drive long-term growth. Recently, the company broke ground on a major expansion of its Satellite Systems facility in Quebec, which is expected to add about 185,000 square feet of advanced manufacturing capacity to its existing infrastructure.

Besides infrastructure expansion, MDA is also actively investing in innovation through projects like CHORUS, its next-generation Earth Observation constellation. Last quarter, the company completed the spacecraft assembly phase for this project, marking a critical milestone as it began integration and testing of the system. Given all these factors, I wouldn’t be surprised if MDA stock delivers even better performance in 2025 than it has in 2024.

Should you invest $1,000 in SmartCentres REIT right now?

Before you buy stock in SmartCentres REIT, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and SmartCentres REIT wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Jitendra Parashar has positions in Mda Space. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »

ways to boost income
Tech Stocks

How I’d Invest $11,500 in Canadian Fintech Stocks to Revolutionize My Finances

Propel Holdings stock's recent dip could be a trading opportunity for long-term financial gains. Here's why the fintech stock is…

Read more »

Start line on the highway
Tech Stocks

Where I’d Invest $5,000 in Growth Stocks With Long-Term Potential Through 2030

DO you have $5,000 to invest to grow your wealth over the long term? These growth stocks could deliver strong…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

The Only 2 AI Stocks You’ll Need for Long-Term Growth

Here are two top Canadian tech stocks that could help you benefit from surging demand for AI technology and infrastructure.

Read more »