If you’re looking for an incredible growth stock in the Canadian stock market, you may want to look beyond the usual software, banking, and energy stocks.
I’d look up – quite literally. If I had to choose an under-the-radar Canadian growth stock that could be much bigger 10 years from now, MDA Space (TSX: MDA) would be high on my list. This company is quietly building a Canadian technology business around space tech that is becoming increasingly important to governments and commercial customers across the globe. Still, its stock has fallen significantly from its 52-week high. That volatility gives long-term investors a much more interesting price to buy it.
In this article, I’ll explain why MDA could be the hidden gem of the decade and why its recent pullback makes it look undervalued.
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MDA Space stock
In short, this Toronto-based space technology firm operates across three main areas, including satellite systems, robotics and space operations, and geointelligence. Its tech solutions support communications satellites, Earth observation, space exploration, and other critical space infrastructure.
At the time of writing, MDA stock traded at $40.84 per share with a market cap of $6.6 billion. Its shares are down roughly 28% over the last three months and remain nearly 40% below their 52-week high.
That steep decline in recent quarters looks much less concerning when viewed over a longer time frame, as MDA stock is still up about 271% in three years. Even after that long-term run, the company’s latest results suggest its growth story is far from over.
Growth remains strong
One of the key factors that make MDA stock look like the hidden gem of the decade is the strength of its underlying business growth as it continues to show solid business momentum.
In the second quarter, the Canadian space technology firm’s revenue climbed nearly 34% year-over-year (YoY) to $499 million. Higher work volumes across all three business areas backed that growth.
Its satellite systems revenue jumped nearly 45% YoY in the latest quarter, mainly because of higher work volumes on the Telesat Lightspeed program. At the same time, MDA’s robotics and space operations segment revenue also rose about 13% to nearly $100 million as work on Canadarm3 increased. Similarly, its geointelligence revenue advanced nearly 20% from a year ago, helped by higher volumes from new programs.
With this, the company’s adjusted net profit improved nearly 13% YoY to $51.8 million in the latest quarter. Adding to the optimism, MDA finished the quarter with a net cash position of $152.8 million and total liquidity of $1.1 billion.
Why this long-term growth opportunity looks attractive
Meanwhile, MDA is continuing to build the foundation for long-term growth. The company ended the June quarter with a solid $4 billion backlog as new bookings exceeded the revenue converted from backlog.
Another positive is MDA’s expanding satellite manufacturing capacity. Its new high-volume facility in Montreal is now operating. In August, the first eight Globalstar replenishment satellites developed, integrated, and tested by MDA were successfully launched. The remaining nine satellites were in the final stages of integration.
Moreover, MDA is preparing its MDA CHORUS Earth observation constellation for a planned late-2026 launch, with commercial operations expected to begin in early 2027. This system is designed to serve government and commercial customers with advanced radar imaging capabilities.
Foolish takeaway
Clearly, MDA Space already has strong revenue growth, a multibillion-dollar backlog, new production capacity, and several long-term growth initiatives underway. Its fundamental strengths could help it keep converting backlog into revenue while expanding its satellite, defence, robotics, and Earth observation businesses. That’s why I look at it as an amazing long-term growth opportunity hiding behind a significant share-price pullback.
