MERCURY SYSTEMS INC (MRCY) Stock Fundamental Analysis
NASDAQ:MRCY - Nasdaq - US5893781089 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to MRCY. MRCY was compared to 65 industry peers in the Aerospace & Defense industry. While MRCY seems to be doing ok healthwise, there are quite some concerns on its profitability. MRCY has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
MRCY had positive earnings in the past year.
In the past year MRCY had a positive cash flow from operations.
In multiple years MRCY reported negative net income over the last 5 years.
In multiple years MRCY reported negative operating cash flow during the last 5 years.
1.2 Ratios
With a Return On Assets value of -2.69%, MRCY is not doing good in the industry: 67.69% of the companies in the same industry are doing better.
Looking at the Return On Equity, with a value of -4.48%, MRCY is doing worse than 64.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.69% | ||
| ROE | -4.48% | ||
| ROIC | N/A |
ROA(3y)-2.16%
ROA(5y)0.4%
ROE(3y)-3.47%
ROE(5y)-0.01%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MRCY has a Gross Margin (27.37%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of MRCY has declined.
MRCY does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 27.37% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-17.45%
GM growth 5Y-11.71%
2. Health
2.1 Basic Checks
MRCY does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for MRCY has been increased compared to 1 year ago.
MRCY has more shares outstanding than it did 5 years ago.
MRCY has a worse debt/assets ratio than last year.
2.2 Solvency
MRCY has an Altman-Z score of 2.69. This is not the best score and indicates that MRCY is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.69, MRCY perfoms like the industry average, outperforming 44.62% of the companies in the same industry.
MRCY has a debt to FCF ratio of 4.04. This is a neutral value as MRCY would need 4.04 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.04, MRCY is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
A Debt/Equity ratio of 0.41 indicates that MRCY is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.41, MRCY is doing good in the industry, outperforming 61.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 4.04 | ||
| Altman-Z | 2.69 |
ROIC/WACCN/A
WACC10.11%
2.3 Liquidity
A Current Ratio of 3.44 indicates that MRCY has no problem at all paying its short term obligations.
MRCY has a Current ratio of 3.44. This is in the better half of the industry: MRCY outperforms 73.85% of its industry peers.
MRCY has a Quick Ratio of 2.25. This indicates that MRCY is financially healthy and has no problem in meeting its short term obligations.
MRCY has a better Quick ratio (2.25) than 73.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.44 | ||
| Quick Ratio | 2.25 |
3. Growth
3.1 Past
MRCY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 158.02%, which is quite impressive.
MRCY shows a small growth in Revenue. In the last year, the Revenue has grown by 5.66%.
MRCY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.99% yearly.
EPS 1Y (TTM)158.02%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%123.08%
Revenue 1Y (TTM)5.66%
Revenue growth 3Y-3.31%
Revenue growth 5Y4.99%
Sales Q2Q%1.49%
3.2 Future
Based on estimates for the next years, MRCY will show a very strong growth in Earnings Per Share. The EPS will grow by 62.79% on average per year.
The Revenue is expected to grow by 7.03% on average over the next years.
EPS Next Y169.1%
EPS Next 2Y86.56%
EPS Next 3Y62.79%
EPS Next 5YN/A
Revenue Next Year7.85%
Revenue Next 2Y7.01%
Revenue Next 3Y7.03%
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 112.72 indicates a quite expensive valuation of MRCY.
MRCY's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.31. MRCY is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 57.71, which means the current valuation is very expensive for MRCY.
60.00% of the companies in the same industry are cheaper than MRCY, based on the Price/Forward Earnings ratio.
MRCY's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 112.72 | ||
| Fwd PE | 57.71 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MRCY is valued a bit more expensive than the industry average as 63.08% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, MRCY is valued cheaply inside the industry as 93.85% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.61 | ||
| EV/EBITDA | 71.96 |
4.3 Compensation for Growth
MRCY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as MRCY's earnings are expected to grow with 62.79% in the coming years.
PEG (NY)0.67
PEG (5Y)N/A
EPS Next 2Y86.56%
EPS Next 3Y62.79%
5. Dividend
5.1 Amount
No dividends for MRCY!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
52.98
+1.41 (+2.73%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners109.29%
Inst Owner Change-0.5%
Ins Owners1.86%
Ins Owner Change-1.17%
Market Cap3.17B
Analysts74.67
Price Target51.34 (-3.1%)
Short Float %7.24%
Short Ratio7.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)117.5%
Min EPS beat(2)-26.47%
Max EPS beat(2)261.48%
EPS beat(4)3
Avg EPS beat(4)1121.43%
Min EPS beat(4)-26.47%
Max EPS beat(4)4101.68%
EPS beat(8)3
Avg EPS beat(8)306.78%
EPS beat(12)5
Avg EPS beat(12)202.43%
EPS beat(16)7
Avg EPS beat(16)151.38%
Revenue beat(2)2
Avg Revenue beat(2)10.68%
Min Revenue beat(2)1.44%
Max Revenue beat(2)19.92%
Revenue beat(4)4
Avg Revenue beat(4)9.31%
Min Revenue beat(4)1.44%
Max Revenue beat(4)19.92%
Revenue beat(8)4
Avg Revenue beat(8)-1.03%
Revenue beat(12)6
Avg Revenue beat(12)-1.23%
Revenue beat(16)8
Avg Revenue beat(16)-0.93%
PT rev (1m)3.42%
PT rev (3m)17.05%
EPS NQ rev (1m)6.36%
EPS NQ rev (3m)6.36%
EPS NY rev (1m)0.6%
EPS NY rev (3m)0.6%
Revenue NQ rev (1m)-1.71%
Revenue NQ rev (3m)-1.47%
Revenue NY rev (1m)-0.49%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 112.72 | ||
| Fwd PE | 57.71 | ||
| P/S | 3.57 | ||
| P/FCF | 21.61 | ||
| P/OCF | 18.35 | ||
| P/B | 2.18 | ||
| P/tB | 10.66 | ||
| EV/EBITDA | 71.96 |
EPS(TTM)0.47
EY0.89%
EPS(NY)0.92
Fwd EY1.73%
FCF(TTM)2.45
FCFY4.63%
OCF(TTM)2.89
OCFY5.45%
SpS14.85
BVpS24.29
TBVpS4.97
PEG (NY)0.67
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.69% | ||
| ROE | -4.48% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 27.37% | ||
| FCFM | 16.51% |
ROA(3y)-2.16%
ROA(5y)0.4%
ROE(3y)-3.47%
ROE(5y)-0.01%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-17.45%
GM growth 5Y-11.71%
F-Score6
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 4.04 | ||
| Debt/EBITDA | 12.51 | ||
| Cap/Depr | 31.22% | ||
| Cap/Sales | 2.94% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | 364.86% | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.44 | ||
| Quick Ratio | 2.25 | ||
| Altman-Z | 2.69 |
F-Score6
WACC10.11%
ROIC/WACCN/A
Cap/Depr(3y)36.16%
Cap/Depr(5y)52.86%
Cap/Sales(3y)3.63%
Cap/Sales(5y)4.25%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)158.02%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%123.08%
EPS Next Y169.1%
EPS Next 2Y86.56%
EPS Next 3Y62.79%
EPS Next 5YN/A
Revenue 1Y (TTM)5.66%
Revenue growth 3Y-3.31%
Revenue growth 5Y4.99%
Sales Q2Q%1.49%
Revenue Next Year7.85%
Revenue Next 2Y7.01%
Revenue Next 3Y7.03%
Revenue Next 5YN/A
EBIT growth 1Y70.82%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year163.84%
EBIT Next 3Y47.39%
EBIT Next 5YN/A
FCF growth 1Y259.92%
FCF growth 3Y-20.33%
FCF growth 5Y-18.1%
OCF growth 1Y423.1%
OCF growth 3Y-14.67%
OCF growth 5Y-9.14%