Major Drilling (TSX:MDI) Revenue Growth Reinforces Bullish Narratives Despite Thin Margins
Major Drilling Group International (TSX:MDI) has posted a solid Q2 2026 print, with revenue of about CA$244.1 million and EPS of roughly CA$0.17 setting the tone for its latest update. The company has seen revenue climb from CA$160.7 million in Q3 2025 to CA$187.5 million in Q4 2025, then to CA$226.6 million in Q1 2026 and now CA$244.1 million. Quarterly EPS has moved from a loss of about CA$0.11 in Q3 2025 to CA$0.01 in Q4 2025, CA$0.12 in Q1 2026 and CA$0.17 this quarter, giving investors a clear view of how the top and bottom line are tracking as margins ebb and flow.
See our full analysis for Major Drilling Group International.With the latest quarter on the books, the next step is to see how these hard numbers line up with the prevailing narratives around Major Drilling. This highlights where sentiment is on point and where the earnings release tells a different story.
See what the community is saying about Major Drilling Group International
TTM revenue tops CA$819 million but margins stay thin
- On a trailing twelve month basis, revenue sits around CA$819 million with net income of roughly CA$15.9 million, which works out to a modest 1.9% net margin versus 6.1% a year earlier.
- Analysts' consensus view links that lower 1.9% margin to both opportunity and risk, as they expect higher exploration budgets and specialized drilling demand to support growth. They also note that lower margin work like Explomin’s underground drilling and project shutdowns for junior clients can keep profitability under pressure.
- The consensus narrative points to catalysts such as increased gold and copper exploration and a strategic tilt toward specialized services, which already made up 60% of revenue, as reasons margins could improve from here.
- At the same time, the same narrative flags a 60% revenue drop from junior clients and project delays as concrete examples of how easily that 1.9% margin can be squeezed if activity stalls again.
Share price outpaces DCF fair value
- With the stock at CA$13.69, it trades far above the stated DCF fair value of roughly CA$0.19 and on a trailing P/E of 70.5 times earnings, versus about 13.6 times for peers and 20.9 times for the wider Canadian Metals and Mining industry.
- Bears argue that this valuation leaves little room for mistakes, and the numbers give them some backing. The current price is not only well ahead of that DCF fair value but also tied to a trailing margin that fell from 6.1% to 1.9%, making the high multiple harder to justify if growth expectations of roughly 14.3% revenue and 26.1% earnings per year are not met.
- Critics highlight that even though the company has grown earnings about 22% per year over five years, the most recent trailing twelve month profit of about CA$15.9 million is much lower than the earlier run rate implied by higher historical margins.
- What stands out for cautious investors is that the stock trades well above the DCF fair value at the same time analysts only expect earnings margins to climb from 3.6% to 5.5% in a few years, which is still below last year’s 6.1% net margin.
Fast top line ramp, uneven earnings path
- Looking at the last six reported quarters, revenue stepped up from roughly CA$160.7 million in Q3 2025 to CA$244.1 million in Q2 2026, while quarterly net income swung from a loss of about CA$9.1 million to a profit of CA$13.9 million over the same stretch.
- Bulls see this swing back into profitability as supporting their case for stronger future earnings, and the forecast numbers do back that up to a degree. Revenue is expected to grow about 14.3% annually, earnings about 26.1% annually and analysts are modelling profit margins rising from around 3.6% today to 5.5% within three years, yet the quarter by quarter history shows how reliant that path is on steady demand from both senior and junior miners.
- Supportive of the bullish angle, the company has grown earnings by roughly 22% per year over the last five years and has recently moved from the Q3 2025 loss of roughly CA$9.1 million to the latest CA$13.9 million profit as activity improved.
- Holding back the bullish story, the consensus narrative acknowledges that revenue from junior clients fell about 60% and that lower margin contributions from Explomin’s underground drilling can limit how much of that forecast revenue growth actually translates into the higher 5.5% margin analysts are hoping for.
Next Steps
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Major Drilling Group International on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
See the numbers differently? Use that angle to build and share your own take in just a few minutes by starting with Do it your way today.
A great starting point for your Major Drilling Group International research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
See What Else Is Out There
Major Drilling’s thin margins, premium valuation and dependence on volatile exploration budgets leave investors exposed if growth or pricing power slips.
If you want potential upside without paying for stretched expectations, use our these 907 undervalued stocks based on cash flows today to quickly focus on companies where price and fundamentals appear more closely aligned.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com