Q: Hi again,
Just submitted a question about MDA that wasn't well proofread and below is the question as it should have been - I hope you can substitute the corrected version before publishing. Thanks!
Hi 5i,
What are your thoughts on the earnings report issued this morning? To me it looked good, but for a dearth of free cash - is that observation correct and, if so, is it a concern?
Also:
After the last big price drop based on the Globalstar rumour, MDA management wrote:
"MDA Space is monitoring fluctuations in our share price that appear to be the result of unconfirmed and speculative media reports related to mergers and acquisitions in our customer base. As a matter of policy, MDA Space does not comment on rumours or speculation. MDA Space management will provide a full update on its business outlook as part of our next regularly scheduled earnings release on November 14, 2025."
I was looking forward to reading MDA's response to potential loss of contracts this morning, but it's "full business outlook" didn't address the issue at all - although the issue certainly hasn't gone away. Again, cause for concern?
Thanks,
Peter
Just submitted a question about MDA that wasn't well proofread and below is the question as it should have been - I hope you can substitute the corrected version before publishing. Thanks!
Hi 5i,
What are your thoughts on the earnings report issued this morning? To me it looked good, but for a dearth of free cash - is that observation correct and, if so, is it a concern?
Also:
After the last big price drop based on the Globalstar rumour, MDA management wrote:
"MDA Space is monitoring fluctuations in our share price that appear to be the result of unconfirmed and speculative media reports related to mergers and acquisitions in our customer base. As a matter of policy, MDA Space does not comment on rumours or speculation. MDA Space management will provide a full update on its business outlook as part of our next regularly scheduled earnings release on November 14, 2025."
I was looking forward to reading MDA's response to potential loss of contracts this morning, but it's "full business outlook" didn't address the issue at all - although the issue certainly hasn't gone away. Again, cause for concern?
Thanks,
Peter
5i Research Answer:
We have comments on the quarter here. While investors may have expected more comments, it is inherently difficult for management to comment on rumours. They are likely working on new contracts and filling capacity just in case, but without actual deals they cannot comment on those, either. MDA is still in 'spend' mode but it did have positive operating cash flow ($32M). We actually thought the conference call had a more positive tone than we might have expected. The stock has seen broker downgrades and could see year end selling as well. There is risk here but also opportunity. At the current valuation we think pessimism is a bit too high, considering the high barriers to entry in the industry and its long term potential.