Many companies see trade tensions due to a tariff war as a major challenge. North America's stock markets are on edge because investors fear a full-blown trade war. However, a Canadian stock could still explode in 2025, notwithstanding the chaos.

MDA Space (TSX:MDA) believes that tariffs pose minimal threat to its business. At $27.57 per share, the growth stock is up +95.25% from a year ago. The $3.38 billion space technology company plans to expand its reach beyond Canada's border and reduce dependence on American suppliers.

Because of new and existing contracts, market analysts are bullish on the industrial stock. According to Mike Greenley, chief executive officer (CEO) of MDA Space, the exposure to the U.S. is minimal (25% of suppliers). Around 90% of the $4.4 billion backlog comes from outside the United States.

Financial performance

MDA, a space mission partner, is well-positioned to capitalize on the rapidly growing global space industry. The financial results in 2024 reflect management's optimistic outlook. In the 12 months ending December 31, 2024, total revenues and adjusted net income increased 34% and 13% year over year to $1.08 billion and $111 million, respectively. Free cash flow for the year reached $615 million.

Greenley said the MDA Space team delivered another year of strong execution. The top- and bottom-line results should help solidify its strong position in the expanding space industry. He noted the growing backlog and secured contracts in the next phases of the Canadarm3 program worth $1 billion.

Business highlights

In addition to the Canadarm3 robotic program, MDA Space will advance work on several important programs like the Telesat Lightspeed, Globalstar LEO constellations, and MDA Chorus. The latter is its next-generation Earth observation constellation. MDA Space's contract award from Globalstar to manufacture the next-generation LEO constellation is valued at $1.1 billion.

MDA's total backlog at year-end 2024 rose 41.6% to $4.4 billion versus December 31, 2023. The order backlog of $2.3 billion came from the Robotics & Space Operations and Satellite Systems businesses. Notably, operating cash flow soared 5,941% year over year to $815.6 million.

Long-term strategic plan

MDA Space's strategic initiatives cover all of its businesses, and executing targeted growth strategies across end markets and business areas is top-of-mind. Among the priorities are investments in next-generation space technology and services, expanding MDA's presence in high-growth markets and geographies, and scaling and expanding skills, talent and operations to meet current and future market demand.

The positive factors are strong customer demand, robust market activity, and healthy book of business. For fiscal 2025, MDA Space forecast full-year revenues between $1.50 billion and $1.65 billion, or about 46.5% year-over-year growth of the mid-point of guidance. Full-year FCF guidance is neutral to positive.

Collaboration with customers to identify solutions and explore mitigation strategies against any potential impact from U.S. tariffs is ongoing.

Investment takeaway

MDA Space allows investors to participate in a high-growth technology investment. The company has already accomplished many landmark achievements in space. Slowly but surely, the goal of becoming the partner of choice for emerging space companies, prime contractors, and government agencies globally is almost a reality.