Back to top

Image: Bigstock

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

Read MoreHide Full Article

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

The robust demand for space-based remote sensing and increased space exploration programs such as Artemis and Earth science projects are tailwinds.

Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.

Business Tailwinds

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 wide product portfolio allows it to expand the customer base and offset the losses from one product category with benefits from another. It also has access to raw material suppliers at a lower cost, which can improve the overall business efficiency.

The company expects its segments to benefit from increasing defense and space infrastructure budgets. Maxar was recently awarded an Electro-Optical Commercial Layer contract by the U.S. NRO. It includes a five-year base contract worth $1.5 billion with five additional years of options through 2032.

The recent 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.

Moreover, MAXR stock is down 37.2% from its 52-week high level of $42.59 on Jun 25, 2021, making it more affordable for investors.

Revenues are anticipated to rise a respective 3.4% and 8.5% for fiscal 2022 and 2023.

Maxar has an impressive earnings surprise history. The company outpaced estimates in all the trailing four quarters, delivering an earnings surprise of 183.75%, on average.

A Few Headwinds

Wall Street has been facing extreme volatility due to various economic factors. The current interest rate hike by Federal Reserve coupled with the ongoing Russia-Ukraine war and pandemic-induced supply chain woes have made investors uncertain about the global economic recovery.

Maxar faces stiff competition and significant barriers to entering new markets that have the opportunity to offer an array of innovative mobile and fixed communications options.

The cyclical nature of the commercial satellite market poses a significant risk to profitability if Maxar cannot predict customer demand. Delays in the construction of satellites, procurement of requisite components and launch vehicles could harm Maxar’s business.

It has a high total debt to total capital ratio of 58.6%, indicating an increased risk associated with the company.

Stocks to Consider

Some better-ranked stocks from the broader technology space are InterDigital (IDCC - Free Report) , Vishay Intertechnology (VSH - Free Report) and Avnet (AVT - Free Report) . InterDigital and Avnet currently sport a Zacks Rank #1 (Strong Buy), whereas Vishay Intertechnology holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $3.33 per share, increasing 46.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 15%.

InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 141.1%. Shares of IDCC have declined 17.4% in the past year.

The Zacks Consensus Estimate for Vishay Intertechnology’s 2022 earnings is pegged at $2.68 per share, rising 10.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 22.7%.

Vishay Intertechnology’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 4.9%. Shares of VSH have declined 20.2% in the past year.

The Zacks Consensus Estimate for Avnet’s fiscal 2022 earnings is pegged at $6.83 per share, rising 20.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 37.2%.

Avnet’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 21.2%. Shares of Avnet have grown 2.8% in the past year.