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Reasons to Retain Maxar (MAXR) Stock in Your Portfolio For Now

Zacks Equity Research
·3 min read

Maxar Technologies MAXR is expected to benefit from increased demand for the company’s 3D and other innovative geospatial products.

The company’s 2022 and 2023 revenues are anticipated to rise 2.2% and 8.8%, respectively.

MAXR outpaced estimates in all of the trailing four quarters, delivering an earnings surprise of 140%, on average.

The stock is down 46.8% from its 52-week high level of $40.48 on Apr 19, 2022, making it relatively affordable for investors. MAXR has lost 28.7% in the past year against an 20.1% decline of the Zacks sub-industry.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Strong Fundamentals

Maxar is a space technology firm providing satellite imagery and expert intelligence services along with spacecraft and robotics for space exploration, research and national security.

Maxar’s focus on diversifying its products and customer base for the Space Infrastructure segment and higher demand for the company’s 3D and other innovative geospatial products bode well. There is enormous growth potential among three key parts of its addressable market — the U.S. government, other international governments and commercial customers.

Recently, Maxar announced it would work with L3Harris Technologies to design and produce 14 spacecraft platforms and support the latter’s Tranche 1 Tracking Layer contract with the Space Development Agency.

Maxar is focused on launching WorldView Legion satellites in 2022. The acquisition of Vricon enables Maxar to focus on developing the WorldView Legion program and other new offerings within the Earth Intelligence segment, including 3D technology.

Investment in differentiated capabilities and expansion of partnerships with large defense companies is likely to act as a tailwind. The company expects total revenues to be $1.8-1.855 billion for the full year.

However, increasing competition and the cyclical nature of the satellite market are persistent concerns. Maxar’s debt-laden balance sheet is worrisome. As of Jun 30, 2022, it had $19  million in cash and cash equivalents with $2.194 billion of long-term debt compared with the respective tallies of $22 million and $2.06 billion at the end of the previous quarter.

Weakening global macroeconomic conditions, inflation and lingering global supply chain disruptions are other concerns.

Stocks to Consider

Some better-ranked stocks from the broader technology space are Cadence Design Systems CDNS, Keysight Technologies KEYS and Arista Networks ANET. Arista sports a Zacks Rank #1 (Strong Buy) while Cadence and Keysight carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.

Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have lost 0.3% in the past year.

The Zacks Consensus Estimate for Keysight’s fiscal 2022 earnings is pegged at $7.47 per share, up 4.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 11%.

Keysight’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average being 9.3%. Shares of KEYS have lost 6.6% of their value in the past year.

The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 10.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.

Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.3% in the past year.


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