MDA Space (TSX:MDA) is one of the best ways for a Canadian investor to get exposure to the quickly growing space industry. There is a plethora of space opportunity stocks in the United States. However, their valuations reflect sky high valuations (quite literally). Many of these valuations are based on hype rather than reality.
The exciting thing is that MDA Space is real business with substantial opportunities. MDA has a market cap of $5.26 billion. Its stock has been on a tear as the company has announced some huge contract wins in 2024 and 2025. Its stock is up 44% in 2025 and nearly 200% over the past five years.
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Here’s why MDA Space could have a huge growth opportunity
MDA is a leading global supplier of satellite systems, robotics, space components, and geo-intelligence services.
It has established a dominant niche in building out low Earth orbit (LEO) satellite constellations. Demand for these constellations has been rapidly growing as smart phone makers and communications companies look to provide global connectivity (even in remote locations).
Satellites are increasingly being used for maritime, defence, agriculture, weather, mining, and shipping/logistic applications. The fast-decreasing cost to launch satellites is creating a race to move constellations into service as quickly as possible.
Likewise, space exploration is of growing interest to major countries around the world. China operates its own space station currently. The international space station will transition to several commercially operated space stations after 2030. This will assist in further missions to the moon and even Mars.
Due to all these factors, the global space economy is expected to grow by a 5% compounded annual growth rate (CAGR) for the decade ahead. All this means, there are plenty of opportunity for MDA going forward.
How has MDA Space performed over the years?
MDA has grown its revenue from $412 million in 2020 to $1.08 billion in 2024. That is a 27% compounded annual growth rate (CAGR). Earnings before interest, tax, depreciation, and amortization (EBITDA) has grown by a 26% CAGR to $217 million in 2024. Adjusted net income has grown by a 42% CAGR.
Today, MDA sits with a $4.6 billion backlog. That should rise significantly next quarter given that it just announced a large US$1.3 billion constellation contract. In its recent second quarter, revenues rose by 54% to $373 million. Adjusted EBITDA increased 57% to $76.3 million.
It increased its 2025 guidance to expect around 48% revenue growth, 45% EBITDA growth, and 19-20% EBITDA margins.
The company has a good balance sheet due to strong cash generation. After its SatixFy acquisition, net debt to adjusted EBITDA is modestly below one.
The Foolish takeaway
So, you might be wondering, is MDA Space a good buy now? Well, that is a little more challenging to decipher.
After the strong stock appreciation in 2025, MDA trades with a trailing price-to-earnings ratio of 47 times and a trailing enterprise value (EV)-to-EBITDA ratio of 23 times. Given its large growth opportunity, the market has high expectations for this stock. Yet, it actually trades at a wide discount to other more speculative space peers.
The good (and bad news) is that this stock can be very volatile. The best time to add would be on a serious drop. Its stock is down about 10% since its earnings, so it might look attractive soon if it continues to dip.
