Sometimes the market makes it obvious when a stock is breaking out, and sometimes it takes a little digging. MDA Space (TSX:MDA) has been one of those rare names that managed to triple in value over the past year — all while building a pipeline that could fuel years of expansion. For investors looking for growth and tailwinds that stretch beyond borders, this space technology leader is worth a close look.
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What happened?
Over the past year, MDA’s share price has surged more than 200%, moving from around $14 to above $45. That’s not a quiet move in any market, but what makes it more compelling is that it hasn’t been driven by hype. Instead, it’s been the result of contract wins, backlog growth, and earnings that keep surprising to the upside.
In its most recent quarter, revenue jumped 54% year over year to $373 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 57% to $76 million. Earnings per share (EPS) doubled to $0.38. Those are the kinds of growth rates you expect from a tech start-up, not a Canadian aerospace veteran.
More to come
The momentum isn’t slowing either. Backlog now sits at $4.6 billion, and management expects full-year revenue to land between $1.57 and $1.63 billion, nearly 50% higher than last year. A big driver has been MDA’s satellite systems business, where the growth stock continues to land contracts in a world increasingly reliant on communications, earth observation, and defence networks.
Just after the quarter closed, MDA was tapped by EchoStar to deliver over 100 satellites for a new low-earth orbit constellation, an initial $1.8 billion contract that could double in size. That deal alone adds years of visibility and puts MDA at the forefront of a market that is only getting bigger.
Looking ahead
What sets MDA apart is its ability to play in multiple arenas at once. It remains a trusted partner to Canada’s space program and armed forces, while also expanding commercially with global telecoms and private operators. Its uncrewed aircraft contracts for the Royal Canadian Navy highlight how the growth stock is growing beyond satellites, developing capabilities that enhance maritime security and data intelligence. By layering on acquisitions like SatixFy Communications, which bolsters its digital satellite communications offering, MDA positions itself as an end-to-end provider rather than just a contractor.
From a financial standpoint, the balance sheet looks sturdier than it did just a year ago. MDA now has a net cash position of over $400 million, giving it flexibility to fund growth and weather volatility. Cash flow dipped year over year due to working capital changes. Yet with operating cash flow near $1 billion over the past 12 months, the growth stock has plenty of runway. Valuation is still demanding, trading around 30 times forward earnings, but with earnings expected to grow nearly 50% this year, investors could argue the premium is justified.
Foolish takeaway
Of course, risks remain. The growth stock has been on a tear, and it’s fair to wonder if momentum has run too hot. Any delays in satellite production or unexpected cuts in government spending could hit results. Tariffs between Canada and the U.S. also pose a new risk, though management has said it’s working with customers to mitigate the impact. The other challenge is scale. With such rapid growth, MDA must prove it can execute without stretching its resources too thin.
Still, for long-term investors, MDA looks like a company entering a new phase. It has the balance sheet, the backlog, and the contracts to support sustained growth. The market has already rewarded early believers, but that doesn’t mean the opportunity is gone. MDA is carving out a leadership role in an industry that is only going to matter more in the next decade. If you’re looking for a Canadian growth story with dividend potential down the road, this stock may still be just getting started.
