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Why Is Maxar (MAXR) Up 4.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Maxar Technologies (MAXR - Free Report) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Maxar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Maxar’s Q1 Loss Narrower Than Expected

Maxar reported a loss per share of 10 cents for first-quarter 2022 compared with a loss of $1.30 reported in the prior-year quarter. The Zacks Consensus Estimate for first-quarter loss was pegged at 12 cents.

The company reported quarterly revenues of $405 million, improving from the year-ago quarter’s $392 million. The upside can be attributed to increased revenues at the Space Infrastructure. The top line also surpassed the consensus mark of $399.5 million.

Segmental Details

Revenues from Earth Intelligence increased marginally to $251 million. The top-line performance was primarily driven by increases from commercial, international defense and intelligence customers, partly offset by a decline in revenues from the US government. The segment’s adjusted EBITDA margin was down to 39.4% million from 42.8% a year ago.

Revenues from Space Infrastructure increased to $177 million from $155 million reported in the prior-year quarter. Revenues increased due to a $28-million impact of the SXM-7 satellite's non-performance in the three months ending Mar 31, 2021, which did not recur in the quarter under review. Adjusted EBITDA surged to $19 million from a loss of $12 million recorded a year ago.

Other Details

Total quarterly adjusted EBITDA was $84 million compared with $67 million a year ago, with respective margins of 20.7% and 17.1%.

As of Mar 31, 2022, the order backlog decreased to $1,621 million from $1,893 million as of Dec 31, 2021. The decrease in backlog was primarily due to decreases in the Earth Intelligence and Space Infrastructure segments.

The selling, general and administrative (SG&A) costs were $104 million compared with $84 million in the prior-year quarter. The increase was primarily due to an increase in labor-related expenses, driven by annual merit increases and fringe benefits.

Cash Flow & Liquidity

As of Mar 31, 2022, Maxar generated $48 million of cash from operating activities compared with $27 million in the prior year. The company incurred a capital expenditure of $64 million, driven by the Worldview Legion program.

As of Mar 31, 2022, the company had $22 million in cash and cash equivalents compared with $47 million in the quarter ended Dec 31, 2021. As of Mar 31, 2022, the company had long-term debt of $2,060 million compared with $2,062 million in the quarter ended Dec 31, 2021.

Guidance

For 2022, Maxar expects revenues of $1,790-$1,870 million. It expects an adjusted EBITDA of $440-$520 million. The operating cash flow is expected to be $340-$420 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -51.61% due to these changes.

VGM Scores

At this time, Maxar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Maxar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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