MDA Space (TSX:MDA) stock has been on a remarkable run, recently hitting an all-time high of $46 and gaining over 55% year to date. Over the past year, the stock has surged an incredible 277%, as investor enthusiasm builds around the company’s strong performance and long-term prospects.
What’s behind the rally in MDA Space stock?
The momentum behind this rally in MDA Space stock is due to its strong operational performance and robust demand across MDA’s three core segments, including Satellite Systems, Robotics & Space Operations, and Geointelligence. In the first quarter (Q1) of 2025, the space technology company delivered impressive results, with revenue jumping 68% year over year to $351 million. Adjusted EBITDA rose 63% to $69 million, while adjusted earnings per share (EPS) nearly doubled to $0.29 from $0.15.
The Satellite Systems division was the standout, with revenue surging 155% to $222 million, driven by the ramp-up of the Telesat Lightspeed and Globalstar next-gen constellation programs. Robotics & Space Operations grew 9% year over year to $77 million, supported by ongoing work on the Canadarm3 program. Meanwhile, the Geointelligence segment held steady at $52 million, as customer demand for its Earth observation offering remains strong.
MDA’s order backlog stood at $4.8 billion at the end of Q1, offering solid revenue visibility for the coming years. This financial strength and project pipeline have been instrumental in pushing the stock higher.
Is MDA Space stock a Buy?
MDA Space has already seen an impressive rally, which indicates that the market has priced in a lot of positives. But despite the recent gains, the company’s growth story appears far from over.
While the recent rally has driven MDA Space stock’s valuation higher, it is currently trading at the next 12-month price-to-earnings (P/E) multiple of 31.3, which still looks compelling given its solid growth potential.
Global demand for space-based solutions is accelerating, driven by both commercial and government investment. From satellite communications and earth observation to climate monitoring and defence applications, space is becoming increasingly essential to critical infrastructure and national security. As a leading provider of innovative space technologies, MDA Space is in a prime position to benefit.
What sets MDA Space apart is its diverse and proven portfolio of technologies, which positions it well to meet the evolving needs of its customers. Its pipeline is robust, fueled by both existing contracts and new program wins. The company is seeing heightened activity across the board, with increasing demand for its technologies not only in commercial projects but also in defence, intelligence, and earth observation.
While global trade dynamics such as tariffs pose potential headwinds, MDA Space is taking steps to mitigate risks. It benefits from a well-diversified supply chain and a broad international footprint. About 80% of its $4.8 billion backlog at the end of Q1 originated from markets outside the U.S. Moreover, many of its offerings are differentiated and cost-competitive, making them hard to substitute.
Customer engagement remains strong. Further, MDA’s solid profitability and a strong balance sheet position it well to fund its expansion and drive long-term value.
In short, its next-gen products and solutions, solid long-term demand trends, and continued operational strength make MDA Space stock a compelling long-term bet.
