The Canadian space tech industry is quietly becoming one of the most exciting sectors for growth-oriented investors. With global demand for satellite technology, space exploration, and communication infrastructure on the rise, companies in this sector are showing huge upside potential.

MDA Space (TSX:MDA), the Toronto-based global space firm, could be a good example of a top player in the international space race. With a market cap of $3.4 billion, MDA stock currently trades at $20.39 per share with an outstanding 146% year-to-date gain. As we look ahead to 2025, several factors could propel the stock to even greater heights. In this article, I'll highlight the top three fundamental reasons why MDA stock could continue its strong momentum into 2025.

MDA Space's strong financial growth trends

The first main reason MDA stock could continue soaring in 2025 is the ongoing strength in its financial growth trends. In the latest quarter ended in September 2024, the company posted a solid 38% YoY (year-over-year) rise in its total revenue to $282.4 million with the help of higher work volumes across its core business operations, especially in Satellite Systems and Robotics & Space segments.

MDA's Satellite Systems segment stood out, with a remarkable 77.5% YoY increase in revenue to $167.6 million, fueled by major programs like the Telesat Lightspeed project and contracts for non-geostationary satellite constellations.

On the profitability side, the company's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed by 30% from a year ago to $55.5 million with the help of higher revenue and a favourable program mix. This figure translated into an adjusted EBITDA margin of 19.7% for the third quarter, which aligns with the company's full-year guidance range of 19-20%.

Increasing backlog

The second reason MDA stock is likely to soar in 2025 is its expanding backlog, which could be a strong sign of its future growth. At the end of the September 2024 quarter, the company had a backlog of $4.6 billion, reflecting an outstanding 49% YoY increase.

Interestingly, a large portion of this backlog is driven by high-value, long-term contracts, such as the $1 billion Canadarm3 project for NASA's Lunar Gateway. These factors not only provide it with clear revenue visibility but also highlight the strong demand for MDA's cutting-edge space technology and solutions.

Continued investments in growth initiatives

Another important factor that could help MDA stock surge in 2025 and beyond is its continued focus on strategic investments and scaling its operations further to drive long-term growth. Recently, the company broke ground on a major expansion of its Satellite Systems facility in Quebec, which is expected to add about 185,000 square feet of advanced manufacturing capacity to its existing infrastructure.

Besides infrastructure expansion, MDA is also actively investing in innovation through projects like CHORUS, its next-generation Earth Observation constellation. Last quarter, the company completed the spacecraft assembly phase for this project, marking a critical milestone as it began integration and testing of the system. Given all these factors, I wouldn't be surprised if MDA stock delivers even better performance in 2025 than it has in 2024.