# MDA Space (MDA)

No longer a pick since 2026-10-11. The price is above the AI estimate, it has no moat, and its free cash flow is negative.

Sector: Space systems & satellites

| Field | Value |
|---|---|
| Price | CA$40.18 |
| Fair value (AI estimate) | CA$38.20 |
| Discount to fair value | -5.2% |
| Fair value uncertainty (AI estimate) | High |
| Economic moat (AI estimate) | None |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 1.93 |
| Data as of | 2026-10-11 |
| Next earnings | 2026-11-13 (estimate) |

## In short

The market pays a growth price for the MDA Space backlog, so the price holds only if Lightspeed launches on time, free cash flow turns positive in 2027 and the two acquisitions add profit.

## Themes and gap

- Themes: High debt (leverage)
- Gap type: Can close (closable)
- Why: The first Telesat Lightspeed launches at the end of 2026, the closing of the two acquisitions and the 2027 guidance in early 2027 are dated tests within about a year.

## About

MDA Space is a Canadian space company. It has three segments. Satellite Systems builds satellites and their parts, such as antennas and electronics. Its main product is MDA AURORA, a software-defined satellite that operators can reprogram in orbit. Robotics & Space Operations builds space robots, such as the Canadarm robotic arms for the Canadian Space Agency. Geointelligence sells radar images of Earth from RADARSAT-2 and builds the new MDA CHORUS radar satellites. Its largest programs are satellites for the Telesat Lightspeed constellation, satellites for Globalstar, and Canadarm3. MDA Space reports in Canadian dollars. Its shares trade on the Toronto Stock Exchange and, since March 2026, also on the New York Stock Exchange.

## Thesis

The market prices MDA Space above the AI estimate, because it pays a growth price for space companies with large backlogs, and MDA Space reports a C$40 billion pipeline. The share price fell after its high in May 2026, but the market still pays more for each dollar of 2027 adjusted EBITDA than the base case of the AI estimate. The AI estimate is lower because free cash flow is negative. It was negative C$178 million in the first half of 2026, and capital spending on chips and the Montreal plant uses most of the EBITDA. A few customers give most of the revenue, and their plans change. EchoStar cancelled a large contract in 2025, Amazon plans to buy Globalstar, and Canada will use the Canadarm3 work for the lunar surface. The company also spends about C$1.8 billion on Blue Canyon Technologies and CLS, and it pays with new shares and new debt. For the price to hold, Telesat must start the Lightspeed launches at the end of 2026 with MDA satellites and chips that arrive on time. Free cash flow must become positive in 2027 while the backlog stays at about C$4 billion or more. The two acquisitions must close and add EBITDA, and net debt must stay in the target range of 1.5 to 2.5 times adjusted EBITDA. The evidence arrives with the Q3 2026 results in about November 2026, the first Lightspeed launch and the acquisition closings near the end of 2026, and the 2027 guidance in about March 2027. If these tests pass, growth can support the price over the next two to four quarters. If a large customer changes or cancels its constellation again, the price can fall to the AI estimate or below.

## Checkpoints

- Nov 13, 2026 (estimate): Q3 2026 results: cash flow and backlog. Status: Pending. Watch: Free cash flow near zero or better and backlog of C$4 billion or more pass; another large cash outflow or a lower backlog fails.
- Q4 2026 (estimate): Blue Canyon Technologies and CLS purchases close. Status: Pending. Watch: Both deals close with net debt in the 1.5 to 2.5 times target range passes; a delay into mid-2027 or a higher leverage fails.
- Dec 2026 (estimate): First Telesat Lightspeed launch. Status: Pending. Watch: The first MDA-built Lightspeed satellites launch by the end of 2026 passes; a new delay because of satellites or chips fails.
- Mar 2027 (estimate): Q4 2026 results and 2027 guidance. Status: Pending. Watch: 2027 guidance near 50% revenue growth with the acquisitions, and positive free cash flow, passes; lower growth or another year of negative free cash flow fails.
- 2027 (estimate): Amazon closes its purchase of Globalstar. Status: Pending. Watch: Amazon keeps the MDA Space satellite programs after the deal closes passes; a cut or cancellation of the Globalstar satellites fails.

## Valuation

The fair value, the moat and the uncertainty on this page for MDA Space are an AI estimate from October 8, 2026. The fair value is in Canadian dollars. They are not an analyst's values. An AI research agent calculated them from MDA Space's releases. The method values the business without the two pending acquisitions at a multiple of its 2027 adjusted EBITDA, in three cases. On August 7, 2026, management guided 2026 adjusted EBITDA to C$330 million to C$370 million, with a midpoint of C$350 million. The base case assumes 10% growth to C$385 million in 2027, at 13 times. The low case assumes that a large customer cuts a program, so EBITDA stays at C$350 million, at 10 times. The high case assumes 20% growth to C$420 million, at 16 times. The growth rates, the multiples and the weights of 25%, 50% and 25% are assumptions. The weighted enterprise value is about C$5.06 billion. The estimate adds the net cash of C$152.8 million at June 30, 2026. It also adds about C$1.12 billion of net proceeds from the share offering of July 14, 2026: US$819 million at 1.41 Canadian dollars per US dollar, less 3% for fees. The exchange rate and the fees are assumptions. It takes away C$133.3 million of lease liabilities at June 30, 2026. It values Blue Canyon Technologies and CLS at their purchase prices, so their cost and the new debt that pays for them cancel out. This is also an assumption. The result is about C$6.20 billion, or about C$38.20 per share on 162,130,797 shares at September 11, 2026. The low case gives about C$28.60 per share and the high case about C$48.50. The cases are far apart, and free cash flow is negative, so the uncertainty is High. The moat rating is None. The Q2 2026 release of August 7, 2026 says that MDA Space started in 1969 and is the largest space technology company in Canada. Its long record in space robotics, such as the Canadarm arms, and in radar satellites gives it intangible assets with the Canadian Space Agency and other governments. But most revenue now comes from a few commercial satellite constellations. Other large companies also build satellites, and SpaceX and Amazon build their own. A customer can cancel a program, as EchoStar did in September 2025. The gross margin was 25.3% and the adjusted EBITDA margin was 19.3% in Q2 2026. But free cash flow was negative C$178 million in the first half of 2026. Thus the estimate does not find clear evidence of returns above the cost of capital that last 10 years or more.

As of 2026-10-08.

Sources:

- https://mda-en.investorroom.com/2026-08-07-MDA-SPACE-REPORTS-SECOND-QUARTER-2026-RESULTS
- https://mda-en.investorroom.com/2026-07-14-MDA-SPACE-ANNOUNCES-CLOSING-OF-ITS-UPSIZED-BOUGHT-DEAL-OFFERING-OF-COMMON-SHARES
- https://mda-en.investorroom.com/2026-09-21-MDA-SPACE-ANNOUNCES-TSX-APPROVAL-OF-NORMAL-COURSE-ISSUER-BID
- https://mda-en.investorroom.com/2026-06-19-MDA-Space-announces-definitive-agreement-to-acquire-US-based-Blue-Canyon-Technologies-LLC
- https://mda-en.investorroom.com/2026-07-08-MDA-Space-Enters-into-Firm-Offer-to-Acquire-Collecte-Localisation-Satellites-CLS-,-a-Global-Leader-in-AI-Driven-Earth-Observation-Data-Analytics

## Balance sheet

- Cash: CA$398M
- Debt: CA$245M
- Net cash: CA$153M

MDA Space had net cash at June 30, 2026, but it is borrowing to pay for two acquisitions after that date. Management expects net debt of 1.5 to 2.5 times adjusted EBITDA after both deals close. Debt is long-term debt and excludes C$133.3 million of lease liabilities. Total liquidity was C$1.1 billion. Net debt was 0.4 times adjusted EBITDA at December 31, 2025, and it became net cash in 2026 after the US share offering in March. On July 14, 2026, MDA Space sold 23 million new shares for about US$819 million. On August 5, 2026, it issued C$600 million of 6.50% senior unsecured notes due 2033. The purchase of Blue Canyon Technologies costs US$620 million, and committed senior secured debt also funds it. The purchase of about 70% of CLS costs about €567 million, and MDA Space can also pay about €198 million to repay the CLS debt. Cash and a term loan pay for the rest. Free cash flow was negative C$178 million in the first half of 2026, and capital spending for 2026 is guided at C$225 million to C$275 million. The releases do not give a credit rating. The debt is moderate for the size of the company, but the company must turn its backlog into cash to keep debt in the target range.

As of 2026-06-30.

Sources:

- https://mda-en.investorroom.com/2026-08-07-MDA-SPACE-REPORTS-SECOND-QUARTER-2026-RESULTS
- https://mda-en.investorroom.com/2026-07-14-MDA-SPACE-ANNOUNCES-CLOSING-OF-ITS-UPSIZED-BOUGHT-DEAL-OFFERING-OF-COMMON-SHARES
- https://mda-en.investorroom.com/2026-08-05-MDA-SPACE-ANNOUNCES-CLOSING-OF-C-600-MILLION-OFFERING-OF-SENIOR-UNSECURED-NOTES-DUE-2033
- https://mda-en.investorroom.com/2026-06-19-MDA-Space-announces-definitive-agreement-to-acquire-US-based-Blue-Canyon-Technologies-LLC
- https://mda-en.investorroom.com/2026-07-08-MDA-Space-Enters-into-Firm-Offer-to-Acquire-Collecte-Localisation-Satellites-CLS-,-a-Global-Leader-in-AI-Driven-Earth-Observation-Data-Analytics

## Recent events

- 2026-09-21: The TSX approved a normal course issuer bid. MDA Space can buy back up to 8,106,539 shares, about 5% of the shares, from September 23, 2026 to September 22, 2027.
- 2026-09-16: MDA Space announced its full MDA CHORUS product range. It plans to launch the MDA CHORUS satellites in late 2026.
- 2026-09-10: MDA Space showed MDA AURORA Black, a software-defined satellite for defence customers.
- 2026-08-15: A SpaceX Falcon 9 launched the first 8 of 17 replacement satellites that MDA Space built for Globalstar. The other 9 satellites are in final integration.
- 2026-08-07: MDA Space reported Q2 2026 results. Revenue rose 33.6% to C$498.6 million, and adjusted EBITDA rose 26.2% to C$96.3 million. Free cash flow was negative C$150.2 million. Backlog was C$4.0 billion. Management narrowed 2026 revenue guidance to C$1.8 billion to C$1.9 billion.
- 2026-08-06: The Canadian Space Agency said that it will use its Canadarm3 investments for work on the lunar surface. On its August 7 call, MDA Space said that the Canadarm3 work continues in the same financial scope and timeline.
- 2026-08-05: MDA Space closed an offering of C$600 million of senior unsecured notes. The notes pay 6.50% and are due in 2033. The money pays for part of the Blue Canyon Technologies purchase.
- 2026-08-04: Telesat added 27 MDA AURORA satellites to the Lightspeed constellation. MDA Space will now build 225 satellites, and the contract value rose by C$474 million.
- 2026-07-14: MDA Space closed a share offering of 23 million shares at US$35.60 each, for about US$819 million. The money pays for part of the CLS purchase.
- 2026-07-08: MDA Space made a firm offer to buy about 70% of CLS, a French company that sells Earth observation data, for about €567 million in cash. The French space agency CNES keeps about 30%. MDA Space expects the deal to close in late 2026 or early 2027.
- 2026-06-19: MDA Space agreed to buy Blue Canyon Technologies, a US maker of small satellites, from RTX for US$620 million in cash. It expects the deal to close by the end of 2026.
- 2026-06-12: SpaceX listed its shares on Nasdaq, and many other space stocks fell. MDA Space shares fell about 9% on the TSX that day.
- 2026-05-29: ATB Cormark lowered its rating on MDA Space to Sector Perform from Outperform. The shares fell about 8% that day, one day after their 52-week high.
- 2026-04-13: Amazon agreed to buy Globalstar, an important MDA Space customer. Amazon said that it plans to operate the new satellites from MDA Space. The companies expect the deal to close in 2027. It depends on milestones for the replacement satellites that MDA Space builds.
- 2026-03-16: MDA Space closed an initial public offering in the United States, and its shares started to trade on the New York Stock Exchange.

## Risks

- High: A few constellation programs give most of the revenue. A customer can cancel or change a program. EchoStar cancelled its contract in September 2025, and Amazon now plans to buy Globalstar.
- High: Free cash flow is negative because large programs use working capital. If customers pay late, the company can need more debt or more shares.
- Medium: The Blue Canyon Technologies and CLS purchases add debt and need regulatory approvals. The integration of two large businesses at the same time can go wrong.
- Medium: Lightspeed depends on chips that MDA Space makes. In March 2026, Telesat moved full global service to the end of Q1 2028, because these chips were late.
- Medium: SpaceX and Amazon build their own satellites. Their large constellations can take orders from MDA Space.
- Medium: Two investors started a proposed class action in the Ontario Superior Court about the EchoStar contract. They ask for up to C$340 million. MDA Space says that the claims have no merit.
- Low: Government programs can change. NASA paused the Gateway station in March 2026, and Canada changed the use of Canadarm3.

## Links

- Page: https://picks.kamadorueda.com/company/MDA/
- History of changes: https://picks.kamadorueda.com/company/MDA/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/MDA.json

> Picks is a personal record of stock picks. It gives information only, not financial, investment, tax or legal advice. Prices, fair values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.