📊 MRCY Key Takeaways
Is Mercury Systems Inc. (MRCY) a Good Investment?
Mercury Systems exhibits a credible turnaround trajectory with 72.5% YoY improvement in net losses and steady 9.2% revenue growth, supported by strong balance sheet health and positive free cash flow generation. However, current operating unprofitability, negative interest coverage, and deteriorating margins require demonstrated path to sustainable profitability before investment upgrade.
Mercury Systems is showing early signs of a turnaround: revenue grew 9% YoY and free cash flow is positive with a 9% margin despite GAAP losses. A strong, low-leverage balance sheet and substantial cash provide ample runway to improve operations. However, margins remain negative and interest coverage is weak, so sustained profitability has yet to be demonstrated.
Why Buy Mercury Systems Inc. Stock? MRCY Key Strengths
- Strong revenue growth of 9.2% YoY in competitive electronic components sector
- Substantial loss improvement (72.5% YoY net income improvement) indicating operational turnaround
- Excellent liquidity position with 3.19x current ratio and 331.8M cash reserves
- Positive free cash flow of 39.5M (5.7% FCF margin) despite GAAP operating losses, suggesting non-cash charges masking cash generation
- Conservative capital structure with 0.13x debt-to-equity ratio providing financial flexibility
- Robust liquidity and low leverage (cash ~$335M > LT debt ~$193M)
- Positive operating cash flow and 9% FCF margin
- Improving losses and EPS alongside 9.2% YoY revenue growth
MRCY Stock Risks: Mercury Systems Inc. Investment Risks
- Currently unprofitable with -2.0% operating margin and -4.4% net margin; negative ROE and ROA indicate poor capital efficiency
- Negative interest coverage ratio (-0.6x) means operations cannot service debt obligations, creating refinancing dependency risk
- Operating margin compression despite revenue growth suggests pricing pressure or cost structure challenges in sector
- Unprofitable business model sustainability unclear; turnaround success not yet proven with consecutive profitable quarters
- Capital expenditure and working capital demands may compress free cash flow if growth accelerates
- Negative operating and net margins persist
- Interest coverage (-1.2x) indicates earnings do not cover interest
- Cash generation may rely on working-capital swings while GAAP profitability is negative
Key Metrics to Watch
- Operating margin trend and path to positive operating income by end of FY2026
- Quarterly gross margin stability and operating expense leverage as revenue grows
- Interest coverage ratio improvement and debt service capability from operations
- Free cash flow conversion rate and capital allocation discipline
- Order book visibility and customer concentration risk in defense/aerospace end markets
- Operating margin
- Free cash flow margin
Mercury Systems Inc. (MRCY) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 3.19x current ratio provides a solid financial cushion.
MRCY Profit Margin, ROE & Profitability Analysis
MRCY vs Technology Sector: How Mercury Systems Inc. Compares
How Mercury Systems Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Mercury Systems Inc. Stock Overvalued? MRCY Valuation Analysis 2026
Based on fundamental analysis, Mercury Systems Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Mercury Systems Inc. Balance Sheet: MRCY Debt, Cash & Liquidity
MRCY Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Mercury Systems Inc.'s revenue has shown modest growth of 5% over the 5-year period. The most recent EPS of $-0.50 indicates the company is currently unprofitable.
MRCY Revenue Growth, EPS Growth & YoY Performance
MRCY Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $211.4M | -$2.9M | $-0.04 |
| Q2 2026 | $223.1M | -$15.1M | $-0.26 |
| Q1 2026 | $204.4M | -$12.5M | $-0.21 |
| Q3 2025 | $208.3M | -$19.2M | $-0.33 |
| Q2 2025 | $197.5M | -$17.6M | $-0.30 |
| Q1 2025 | $181.0M | -$17.5M | $-0.30 |
| Q3 2024 | $208.3M | $5.2M | $0.09 |
| Q2 2024 | $197.5M | -$10.9M | $-0.19 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Mercury Systems Inc. Dividends, Buybacks & Capital Allocation
MRCY SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Mercury Systems Inc. (CIK: 0001049521)
📋 Recent SEC Filings
❓ Frequently Asked Questions about MRCY
What is the AI rating for MRCY?
Mercury Systems Inc. (MRCY) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 64% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are MRCY's key strengths?
Claude: Strong revenue growth of 9.2% YoY in competitive electronic components sector. Substantial loss improvement (72.5% YoY net income improvement) indicating operational turnaround. ChatGPT: Robust liquidity and low leverage (cash ~$335M > LT debt ~$193M). Positive operating cash flow and 9% FCF margin.
What are the risks of investing in MRCY?
Claude: Currently unprofitable with -2.0% operating margin and -4.4% net margin; negative ROE and ROA indicate poor capital efficiency. Negative interest coverage ratio (-0.6x) means operations cannot service debt obligations, creating refinancing dependency risk. ChatGPT: Negative operating and net margins persist. Interest coverage (-1.2x) indicates earnings do not cover interest.
What is MRCY's revenue and growth?
Mercury Systems Inc. reported revenue of $693.8M.
Does MRCY pay dividends?
Mercury Systems Inc. does not currently pay dividends.
Where can I find MRCY SEC filings?
Official SEC filings for Mercury Systems Inc. (CIK: 0001049521) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is MRCY's EPS?
Mercury Systems Inc. has a diluted EPS of $-0.51.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is MRCY a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Mercury Systems Inc. has a HOLD rating with 64% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is MRCY stock overvalued or undervalued?
Valuation metrics for MRCY: ROE of -2.1% (sector avg: 22%), net margin of -4.4% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy MRCY stock in 2026?
Our dual AI analysis gives Mercury Systems Inc. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is MRCY's free cash flow?
Mercury Systems Inc.'s operating cash flow is $60.2M, with capital expenditures of $20.7M. FCF margin is 5.7%.
How does MRCY compare to other Technology stocks?
Vs Technology sector averages: Net margin -4.4% (avg: 18%), ROE -2.1% (avg: 22%), current ratio 3.19 (avg: 2.5).