Major Drilling Is Up 28% Because The Harder Case Did Not Break

If you only glanced at headlines about labour shortages, rising costs and softer sentiment toward mining services, Major Drilling Group International might not have looked like an obvious winner. Holding Major Drilling Group International from the start of the year would have returned 28.5%, including dividends. If you had been weighing those early 2026 debates about junior underinvestment, margin pressure and buybacks, what exactly was visible that could justify owning it through that ride?

Major Drilling Group International has already moved. Pinpoint other ways to investigate the theme among 16 top copper producer stocks.

The Argument You Would Have Been Weighing On Major Drilling Group International

The shares cost CA$12.9 at the start of the period, and the debate around Major Drilling Group International split cleanly into two stories about what might happen next.

The optimistic view saw a Fair Value of CA$13.6, a rough estimate of what the price could be if the assumptions played out, built on Explomin adding Latin American contracts and higher exploration budgets feeding more specialized drilling work.

The cautious narrative put Fair Value at CA$12, stressing underinvestment in exploration and low drill utilization as risks that could keep earnings volatile and margins tight.

What The Results Changed For Major Drilling Group International

Major Drilling Group International then reported record fiscal 2026 revenue of CA$889 million alongside Q1 2027 revenue of CA$277.3 million and net income of CA$14.5 million. Net margin rose from 4.4% to 5.2%, which backed the optimistic case that higher exploration work and Explomin scale could support earnings, even with labour and cost pressure still visible.

The clear hinge here was whether higher activity would actually show up in cash generation and profitability. For another contractor style stock, you would test that same assumption by tracking net margin alongside new contract wins rather than only watching headline revenue.

What Today's Price Already Assumes For Major Drilling Group International

At CA$17.18, Major Drilling Group International trades well above its CA$12.9 starting point this year, and this selected Narrative still places Fair Value above that level. The argument leans on multi year exploration contracts in growth regions and on Explomin expanding the Latin American footprint.

For a buyer today, the key question is whether current pricing already reflects the Narrative's view that contract depth, technology investment and complex drilling work will support stronger, more durable profitability than recent margins show.

"While analysts broadly agree that the Explomin acquisition expands Major Drilling's footprint and revenue base in Latin America, this move could be dramatically underestimated as it positions the company for multi-year, high-margin contracts with major miners in a region experiencing outsized demand growth, likely producing a structural lift in long-term revenues and margins."

One Narrative disagrees with today's price. → See where this Narrative says Major Drilling Group International should trade

Before The Next Story Makes Headlines

What if your next investment idea came before the headlines? Go straight to the companies whose prices and our estimates still disagree. Three places to start, with the names waiting behind the link.

• Company 1 - 40% below our estimate - accelerates higher grade ore feed and advances new underground projects.
• Company 2 - 50% below our estimate - expands into premium mall space while scaling responsive omnichannel retail operations.
• Company 3 - 37% below our estimate - acquires design and engineering consultancies focused on infrastructure and water-related projects.

Those are three of them. See all 6 potentially undervalued companies →

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.

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