What happened

Another day, another 10%-plus gain for space stock Maxar Technologies (NYSE:MAXR).

Last week, if you recall, investment banker J.P. Morgan initiated coverage of the space-tech stock with an overweight rating and a $12 price target. The stock has been on an upswing ever since, and Monday was no exception, with Maxar shares closing 10.1% higher than they ended last week.

Man strapped to rockets and wings flies upwards

Image source: Getty Images.

So what

Yet you have to wonder how much longer this can go on -- and whether all the price gains are justified. After all, when J.P. recommended the shares last week, Maxar stock was selling for only a bit more than $7. It's already up 44% from that price, so a lot of the 71% profit the analyst predicted has already been earned.

At today's closing price of $10.11, there's less than a 20% margin of profit left between Maxar's price right now, and the price that J.P. predicted Maxar would hit ... 12 months from now.

Now what

Granted, even if it's less than 71%, a 20% profit is nothing to take a proverbial sneeze at. But here's the thing: J.P. Morgan's recommendation of Maxar stock was predicated upon the company's continuing to win contracts and capitalizing upon those wins to generate enough free cash flow to begin paying down its massive $3.4 billion debt load. The six days since J.P. recommended Maxar stock haven't been nearly enough time to permit Maxar to do any of these things, yet investors have rewarded the stock anyway -- one might even say pre-emptively.

Sure, if Maxar executes as J.P. Morgan predicted it will, the stock's gains may be justified. But this is no sure thing. To hang onto its gains -- much less rack up more -- Maxar needs to win more contracts, make more money ... and pay down that debt.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.