Quality Investor

Mercury Systems, Inc.

Rank #429Startup

MRCY · Nasdaq · Industrials

Mercury Systems, Inc. (MRCY) — Rank #429 by gross profitability (GP/assets 0.12) · ROE -2.0% · Piotroski F-Score N/A.

As-of 2026-09-15 · CIK 0001049521 · all metrics point-in-time as of the filing date.

About

Mercury Systems, Inc., engages in the aerospace and defense electronics industry.

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The company manufactures and sells components, products, modules, and subsystems for defense prime contractors, original equipment manufacturers, government, and commercial aerospace companies. It offers components, including power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; modules and sub-assemblies, such as embedded processing boards, switched fabrics and boards, digital receivers, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video; and integrated subsystems. The company also designs, develops, and manufactures digital radio frequency memory units for various modern electronic warfare applications; radar environment simulation and test systems for defense and intelligence applications; and signals intelligence payloads and EO/IR technologies for small UAV platforms, as well as onboard UAV processor systems for real-time wide area motion imagery. It operates in the United States, Europe, and the Asia Pacific. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. Mercury Systems, Inc.

was incorporated in 1981 and is headquartered in Andover, Massachusetts.

Industry
Aerospace & Defense
Sector
Industrials
State
MA
Filer Category
Large accelerated filer
Fiscal Year End
June 30
Website
mrcy.com

Price History

MRCY+62.2% · +10.2% CAGRSPY+80.5% · +12.5% CAGR

Company Snapshot

P/S is the primary valuation lens for pre-profit companies.

Market Cap

$5.02B

P/E (annual)

P/S (annual)

5.1

P/B

3.4

P/OCF (annual)

49.0

Shareholder Yield

-1.2%

Employees

2,102

Industry

Aerospace & Defense

Exchange

Nasdaq

Signal Flags

1 green
Deferred revenue growingRevenue and deferred revenue both growing — retention signal

Quality Profile

Profitability

1/1 pass
GP / assets
0.12
Return on equity
-2.0%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.55
Current ratio
2.96×
Net cash
$214.31M

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
4.2%

Growth

2/2 pass
Revenue growth
7.9%
Piotroski F-Score
N/A
Share dilution
1.2%

Terry Smith quality gate

Passes 0/5 Terry Smith thresholds

1 of 5 threshold not computable from filed data.

What Growth Is Priced In

Implied revenue growth (10Y)

25.4%

stretched

The annual FCF growth rate today's price requires over a 10-year horizon (discount rate 10%, terminal growth 2.5%).

Dilution drag: 1.2% — per-share value needs a total required return of 26.6% once share-count change is priced in.

vs. own 6-year median revenue growth: 7.4%

priced above its own history

Cost-of-equity sensitivity (implied growth at different discount rates)

r = 8%

20.1%

r = 10% (base)

25.4%

r = 12%

30.0%

Net debt / market cap: -4.3%

Base FCF: $68.1M3Y mean FCF: $71.1M

Valuation History

Current multiple vs historical range at each filing date. Band spans 25th-75th percentile.

P / E

Price / diluted EPS

N/A
46.3xmed 68.4x263.1x

P / S

Price / revenue per share

6.3xExpensive
2.0xmed 4.1x6.3x

P / B

Price / book value per share

4.2xExpensive
1.2xmed 2.4x4.2x

P / GP

Price / gross profit per share

22.2xExpensive
6.0xmed 10.4x22.2x

P / FCF

Price / free cash flow per share

91.7xExpensive
26.4xmed 67.0x91.7x

Burn rate (cash flow) is the primary read at this stage — TAM and product-market fit aren't metrics this dashboard tracks.

Profitability

Gross profitability (GP / assets)

0.12

Primary signal (Novy-Marx).

7th pctl of 43 SIC 36 peers

Return on equity

-2.0%

Gross margin

28.6%

7th pctl of 43 SIC 36 peers

Revenue growth (YoY)

7.9%

RPO growth (YoY)

-99.9%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202420252026
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

0.3%

Revenue CAGR (5Y)

1.3%

Earnings CAGR (3Y)

FCF CAGR (3Y)

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.55

55th pctl of 41 SIC 36 peers (best = lowest)

Current ratio

2.96×

52nd pctl of 43 SIC 36 peers

Quick ratio

0.86×

Net cash

$214.31M

Cash & equivalents minus total debt.

Recession resistance

Revenue through recessions

Worst single-year YoY revenue decline, 17 years of history

Strong
2008-2009 (GFC)
N/AN/A
2020 (COVID)
21.7%Grew through it
Worst year on record(any fiscal year, not recession-limited)
-14.8%Significant decline

Cash-flow health

Free cash flow

$68.09M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

3.29

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

4.2%

Stock-based comp intensity.

Piotroski F-Score

F-Score

N/A

Only 8/9 components determinable.

Lifecycle Phase History

20212026
Op. Leverage
Value
Startup
Decline