Quality Investor

Mercury Systems, Inc.

Rank #408StartupWatchlistCompare with other stocks

MRCY · Nasdaq · Industrials

Mercury Systems, Inc. (MRCY) — Rank #408 by gross profitability (GP/assets 0.12) · ROE -2.0% · Piotroski F-Score N/A.

As-of 2026-10-30 · 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

Company Snapshot

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

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

2,102

Industry

Aerospace & Defense

Exchange

Nasdaq

11/11

Flags passed

MRCY passes 11/11 quality flags

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Deferred revenue growing

No data Balance sheet — not counted as a pass.

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

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%

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

Profitability

Does it make money well?

No warning flags · GP/assets 7th percentile of 47 SIC 36 peers

Gross profitability (GP / assets)

0.12

Primary signal (Novy-Marx).

7th pctl of 47 SIC 36 peers

Return on equity

-2.0%

Gross margin

28.6%

11th pctl of 47 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)

—

Cash Flow Health

Is the cash real?

No warning flags · FCF 329% above net income

Free cash flow

$68.09M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

329.5%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

4.2%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $214.31M

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.55

59th pctl of 45 SIC 36 peers (best = lowest)

Current ratio

2.96×

54th pctl of 47 SIC 36 peers

Quick ratio

0.86×

Net cash

$214.31M

Cash & equivalents minus total debt.

Piotroski F-Score

N/A

Only 8/9 components determinable.

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

2.3 / 5

Fair
Share count trend
1.2%2/5 Fair
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory
-4.1%2/5 Fair

Lifecycle Phase History

20212026
Op. Leverage
Value
Startup
Decline

Price History

MRCY+81.4% · +12.6% CAGRSPY+82.9% · +12.8% CAGR