Maxar Technologies [NYSE: MAXR] was one of the best performers in Thursday trading. It closed the day in the green, up by about 27.71%. This bullish momentum follows the announcement that NASA had chosen Maxar for its lunar project. The project is part of NASA’s mission to send astronauts back to the moon by the year 2024. It’s a project that President Trump is strongly rooting for, as a precursor to sending humans to Mars. The deal is worth $375 million, and has created lots of optimism in this stock.
From a look at Maxar’s day chart, this stock is in a strong bullish trend. The 50-day MA is offering key support at $8.61, and as long as the price holds above this price, Maxar could remain bullish. The key factor that could help sustain it above this level is the NASA contract, which could be a big boost to the revenues of this company going forward. This bullish sentiment is also confirmed on the monthly chart, which is key for trend confirmation. On this chart, Maxar has broken above key resistance at $5.89 on the 100-day MA, and continues trending upwards. With the NASA deal and the positive sentiment it has created in this stock, the next key resistance it could test is $9.05 first and then next around $10.68.
Looking at the books, this deal could help improve the overall standing of this company, which has most of its numbers in the red. For instance, the company’s revenues on a quarterly basis have declined. The company has a quarterly revenue growth (yoy) of around -9.50%. Other numbers in the red include its profit margins, which are at about -64.08%. It’s an indicator that this company has not been making money in the past year, and the NASA deal could help invigorate it back towards profitability. Another interesting facet to this company is its levered free cash flows. The company has levered free cash flows of about $201.78 million. This is great because, it means that it might be capitalized enough to handle the NASA deal and potentially make money. Besides that, the company seems to have enough resources short term to cover its operational expenses. This is evident in its operating cash flow which is positive, and sources show it to be around $94 million.
Nonetheless, as with all other stocks, there are risks to Maxar. The biggest risk is that it has a very low current ratio of 0.82. This is in safe territory, but in a tough operating environment, the company may not be well positioned to meet all its current liabilities fully. That’s a risk for a company that is operating in losses with a net income of around -1.34 billion.
However, with deals like the one with NASA, the company’s fortunes could really change for the better moving forward.