Investing in basically sturdy shares that commerce at a pretty a number of is a stable technique to generate market-beating returns over time. Canadians ought to take into account including high quality, undervalued shares which can be poised to develop income and earnings at a gentle tempo to derive outsized beneficial properties.

One such mid-cap TSX inventory is MDA House (TSX:MDA), which is down 52% from all-time highs. Valued at a market cap of just about $3 billion, MDA House supplies superior area know-how options globally, specializing in three core areas.

• It delivers geospatial intelligence by satellite tv for pc imagery for nationwide safety, local weather monitoring, and maritime surveillance, together with the operation of its RADARSAT-2 satellite tv for pc.
• It develops autonomous robotics, sensors, and management methods for area missions and planetary exploration.
• MDA additionally builds satellite tv for pc methods and subsystems for communication networks, supporting broadband web, direct-to-device connectivity, and low-earth orbit constellations.

The Canadian firm serves authorities businesses, contractors, and purchasers within the area trade worldwide. Regardless of the continuing pullback, the TSX inventory has greater than tripled investor returns during the last three years.

Alternatively, MDA inventory went public in April 2021 and is up “simply” 21% since its preliminary public providing.

The bull case of investing on this TSX tech inventory

In Q3 2025, MDA House reported income of $410 million, a rise of 45% yr over yr, whereas adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) rose 49% to $83 million, indicating a margin of 20%.

The Canadian area know-how firm maintained its full-year outlook regardless of current contract setbacks. On the midpoint estimate, MDA House forecasts 2025 income of $1.6 billion, representing a 48% year-over-year enhance. The corporate ended the quarter with a backlog of $4.4 billion, which supplies top-line visibility by 2026 and past.

In Q3, MDA House accomplished its acquisition of SatixFy Communications, including next-generation satellite tv for pc communication know-how to its portfolio. Nonetheless, the extremely publicized EchoStar contract, price roughly $1.3 billion, was terminated by mutual settlement in September.

MDA House expects full compensation for termination prices and costs, and administration emphasised the cancellation had nothing to do with the corporate’s efficiency or know-how capabilities.

Buyer demand for MDA’s area know-how stays sturdy throughout all three enterprise segments. The Satellite tv for pc Techniques division generated $284 million in income, up 69% from final yr, pushed by work on the Telesat Lightspeed program and Globalstar’s next-generation constellation.

MDA is making stable progress increasing its Montreal facility, which can develop into the world’s largest high-volume satellite tv for pc manufacturing website in its class with the capability to provide two digital satellites per day.

MDA additionally faces some operational headwinds as delays from suppliers pushed again the supply of 9 Globalstar satellites to early 2026. Equally, provide chain points delayed the MDA CHORUS constellation launch to late 2026. The corporate famous it has back-to-back liquidated harm clauses with suppliers to supply recourse for delays.

Is MDA inventory undervalued?

Trying forward, MDA sees rising alternatives in defence spending as NATO nations enhance investments in area capabilities. MDA maintains a $20-billion alternative pipeline over the following 5 years, with $13 billion tied to its satellite tv for pc methods enterprise.

The administration expects to finish 2025 with a constructive free money move whereas persevering with to spend money on development initiatives. Analysts forecast that MDA House’s income will enhance from $1.6 billion in 2025 to $2 billion in 2027. On this interval, adjusted earnings are forecast to develop from $1.47 per share to $1.77 per share.

If the TSX inventory is priced at 18.5 occasions ahead earnings, which is in keeping with its three-year common, it ought to commerce round 45% over the following 15 months.