Mercury Systems Inc Dossier
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SectorIndustrials IndustryAerospace & Defense Beta (adjusted)1.00 Intrinsic Value $51.45median of 3 methodsbased on filings through 3 Jul 2026 Market Price $84.07Price as of 1 Oct 2026 OvervaluedIntrinsic value is 39% below the market price −50% · IV below pricenear fair value ±15%IV above price · +50% Data confidence Sign in to view data confidence Market Cap $5.1B Enterprise Value $5.5B Shares Outstanding 59.5M diluted Moat Rating None Next Earnings Date3 Nov 2026 All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference. ThesisStreet consensus, scenarios, merits, risks, and invalidation triggers Thesis Summary Mercury Systems is executing a successful operational turnaround under CEO Bill Ballhaus, transitioning from a highly fragmented, acquisition-heavy component vendor to an integrated, production-scale systems provider. The company's Q3 fiscal 2026 results demonstrated robust organic growth of 11.5% year-over-year and record bookings of $348 million, driving total backlog to a record $1.6 billion. While the operational pivot is yielding significant margin expansion (Adjusted EBITDA margin up 360 bps to 15.3%), persistent GAAP net losses and a high valuation multiple (forward P/E near 97x earlier in the year) suggest that much of the turnaround's near-term upside is already priced into the stock. Consequently, a Hold rating is maintained as the market monitors the final burn-off of legacy low-margin contracts by fiscal 2027. This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today. Street view · analyst 12-month targets Low · most bearish analyst$74.00 Mean target$106.22 High · most bullish analyst$126.00 Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions. Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026 Scenarios · 12-month scenario targets Bear CaseDownside scenario Supply chain disruptions or integration issues delay the conversion of the backlog, leading to further program cost overruns. Margins remain compressed by persistent legacy contract drag, and cash flow generation disappoints, leaving the company with elevated leverage and a vulnerable valuation multiple. Base CaseCentral scenario The company successfully converts its record $1.6 billion backlog into high-margin production deliveries. Operational efficiencies and automation, particularly at the Phoenix facility, drive Adjusted EBITDA margins toward the high teens. Revenue grows at a mid-single-digit rate for FY26, and the company achieves consistent positive free cash flow in late FY26 and FY27. Scenarios are anchored to street consensus at the research date, with our probabilities and rationale. Key Investment Merits
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All scenarios are estimates and subject to change. Past performance is not indicative of future results. Quality Pillars MembersThis section is available to registered members. Create a free account or sign in to unlock the full breakdown. Explore this dossierValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework. |