With many top TSX stocks trading near their 52-week highs, finding high-quality businesses at compelling valuations has become difficult. That makes meaningful pullbacks in fundamentally sound companies worth examining.
One Canadian stock that looks attractive right now is MDA Space (TSX: MDA). The space technology provider’s shares are down roughly 29% from their 52-week high of $67.90. The decline presents an opportunity to buy and hold this high-growth stock for decades and capitalize on the growing space economy.
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What’s behind the decline in MDA Space stock?
Before we proceed, it’s important to note the reason behind the decline in MDA Space stock. Several near-term factors have weighed on investor sentiment. The company’s share count has increased, leading to a decline in earnings per share (EPS). At the same time, higher capital expenditures have put pressure on margins and free cash flow.
Competition is another consideration. The space industry has become increasingly competitive, with SpaceX playing a particularly important role in launch services and satellite connectivity.
Nonetheless, MDA Space’s underlying fundamentals remain solid, and the company has significant growth opportunities ahead.
MDA Space is positioned for solid growth
Despite the recent pullback, MDA Space’s long-term investment case remains compelling. Its diversified business model spanning Satellite Systems, Robotics & Space Operations, and Geointelligence gives it exposure to several structural growth markets within the global space economy.
In particular, rising government investment in sovereign space capabilities, increasing defence spending, growing demand for satellite connectivity, and the expanding use of space-based data should provide multiple avenues for sustained growth.
The company’s top line momentum reflects solid demand trends. Revenue for the first six months of 2026 reached $963 million, up 33%, year over year. Growth remained broad-based, with higher volumes of work across all three business areas.
More importantly, MDA Space ended the second quarter with a backlog of approximately $4 billion. This provides significant revenue visibility for 2026 and beyond.
The order pipeline further strengthens the outlook. MDA Space has a potential opportunity pipeline of approximately $40 billion. Several of these orders involve government and defence programs across multiple continents. Moreover, some existing customers have expanded their initial orders or awarded follow-on contracts.
MDA Space is further strengthening its growth prospects through acquisitions. Its CLS acquisition adds artificial intelligence (AI)-led Earth observation and satellite IoT capabilities, strengthens its geospatial services business, and is expected to increase adjusted EBITDA and adjusted EPS within the first year while doubling recurring revenue.
Meanwhile, the acquisition of Blue Canyon Technologies expands MDA Space’s addressable market, strengthens its position in the U.S. defence sector, and adds a profitable, cash-generating business.
The bottom line
While MDA Space’s share price reflects near-term concerns, the company’s underlying operating performance remains strong. MDA Space offers exposure to a growing global space and defence market, supported by diversified operations. Its strong backlog, large opportunity pipeline, and strategic acquisitions will enable it to deliver strong earnings and cash flow, supporting its share price.
