Overview
MAXR or Maxar technologies is a space technology solutions firm. They specialize in satellite imagery, and provide services to NASA and the department of defense including robotics, earth imagery, and geospatial analytics and insight. This company has a long history working with NASA, in 1965 it was known as 'philco-ford', and designed and developed the Houston space center for the gemini and apollo missions. Since helping humans reach the moon for the first time, the firm has gone through a number of acquisitions, and acquired multiple other companies itself. Today MAXR has 4 satellites orbiting earth, which they use for their primary business which is imagery. 60% of their business is satellite imagery services, and 40% is space infrastructure.
What do they do with their satellites?
MAXR uses satellite imagery to assist the various branches of the military. The company uses satellite imagery to locate mission critical locations of enemy warships, airbases, communications systems, and other physical infrastructure that the military might need to form a tactical plan. MAXR is a key partner in us army's project TITAN, USDI's MAVEN, and NAVY's project Overmatch. The most exciting (imo) technology MAXR offers involves using geospatial data to identify the locations of individual shooters on the battlefield. Pretty crazy, but the company can use satellites to capture images of the battlefield, and provide imagery to soldiers on the ground that pinpoint locations of enemy footsoldiers. The companies AI can even recommend actions to take against the located individuals.
In the infrastructure business, MAXR has recently delivered NASA a space bus for mission psyche that will be travelling to a resource rich asteroid between mars and Jupiter. As well as developing robotic arms for nasa's OSAM-1 mission. Whose goal is to service and repair satellites in orbit. (as a vast majority of satellites are non operational). Satellite repair and reconstruction could be a hugely profitable enterprise, as it would save costs on launching.
Bullish arguments
- Fundamentals. Fundamentally speaking, MAXR technologies is a very attractively priced company. The firm has generated revenue of 1.7 billion in the trailing 12 months, with a gross profit margin of 730 million, or 42%. Compare that 730 in gm to the companies market cap of 2.76 billion and you realize the firm is very undervalued. 2.7billion$ market cap/730 million annual gm=3.69 market cap/profit. Which is quite low. (to put in context aapl=19, pltr=65, ktos=16, mcd=17, amzn=18, intc=6). This essentially means that if you bought the entire business, you'd make your money back on just the profits in under 4 years.
- Extremely difficult industry to enter, so threat of new competitors is very low.
- Much of the firms business is with multi year, government contracts. So business is locked down for a while. This could be a downside if the company loses a major contract however.
- Highly innovative company in a high growth sector. MAXR is the global leader in satellite imagery, No other company has nearly as many, or as important contracts with nasa and various defense agencies. Even Northrup-Grumman and Boeing aren't even close to MAXR when it comes to earth imagery services and advanced robotics engineering.
- Strong record of delivering net income available to common stock holders. (A lot of companies don't do this).
- Insider/institutional ownership. The firm is owned 66% by institutions, and recently awarded it's insiders 122,000 shares of stock options.
- Technical analysis. The company is currently on a dip, after having found resistance around 41$ for months, before the stock offering.
Bearish arguments
- Debt positions. The company has a large amount of debt. With over 2.5 billion of long term debt.
- Recent dilution via stock offering. The company recently financed their debt by selling 400m of stock.
- shrinking receivables. Accounts receivable are lower this year than any time in the past few years.
disclaimer: I'm holding calls on this company.
Let me know what y'all think. I think the company is really undervalued, and it doing some extremely innovative and exciting things for satellite technology.