Hi there,
Must have been an older post as its been a while since i've looked into the company! Initially, the company received a bid up in price after all the attention Space X was receiving following their successful commercial flight to the space station. It resulted in a wave that led to spikes across the industry - Magellan (MAL) included.
However, since that spike Magellan has been in a steady downtrend. It is now trading at 3 month lows, and those gains have mostly been wiped out. This is surprising, yet not at same time. Historically, the company has had a spotty history of execution which is what held it back. Recently however, things have been looking up. The last two quarters, the company posted strong quarterly results in which it beat on the top and bottom lines. Given the strong recent performance, one would think that it would have a positive effect the company's share price.
Here is the kicker - although the performance was better than expected, it sill represented some pretty decent drops YOY. In fiscal 2020, the expectation is that MAL exits the year with revenue having dropped by 26%. Although things are expected to improve in 2021 (+3.5%), revenue will still be 23.3% shy of 2019 numbers. In other words, revenue isn't expected to fully recover for quite some time as the hit to commercial airline revenue is expected to be significant.
This being said, the company is pretty cheap and there is a lot of negative sentiment baked it. It is trading at less than half book value (0.47) and only 9.51 times forward earnings. Personally, I am not a fan of the company given it has struggled over the past five years - even before the pandemic. Value investors are attracted to the stock, but it is cheap for a reason. It is likely to continue being quite volatile from here until there is more clarity in the commercial aerospace industry. This uncertainty is the main reason why personally, I would not be investing in the company. Although the race to space is a great story, it is not likely to be meaningful to the company's financials over the short to medium term.
Mat