Zacks Investment Research Lowers Mercury Systems (NASDAQ:MRCY) to Strong Sell

Zacks Investment Research downgraded shares of Mercury Systems (NASDAQ:MRCY) from a hold rating to a strong sell rating in a research note issued to investors on Tuesday, Zacks.com reports. Zacks Investment Research currently has $56.00 price objective on the technology company’s stock.

According to Zacks, “Mercury Systems faces intense competition from CACI and SAIC, which is a persistent concern. Moreover, though Mercury has been steadily winning development contracts from the federal government, these low-margin deals are likely to affect its profitability in the long run. Increased investments to expand business might weigh on the company’s bottom-line results in the near term.  Shares have underperformed the industry year to date. However, Mercury Systems reported impressive first-quarter fiscal 2021 with robust organic growth, including the expansion of the microelectronics business. Strong demand for products resulted in significant deal wins. Moreover, modernization in radar, EW and C4I is providing Mercury with new opportunities in weapon systems, space, avionics processing, and mission computing and embedded rugged service.”

Other equities research analysts have also recently issued reports about the company. The Goldman Sachs Group dropped their price target on Mercury Systems from $103.00 to $92.00 and set a buy rating for the company in a report on Friday, May 7th. Canaccord Genuity reaffirmed a hold rating and set a $74.00 price target (down from $94.00) on shares of Mercury Systems in a report on Tuesday, May 11th. Finally, Jefferies Financial Group raised Mercury Systems from a hold rating to a buy rating and set a $80.00 price target for the company in a report on Thursday, May 6th. They noted that the move was a valuation call. One investment analyst has rated the stock with a sell rating, two have issued a hold rating and three have assigned a buy rating to the company’s stock. The company has a consensus rating of Hold and an average price target of $86.63.

Mercury Systems stock opened at $66.44 on Tuesday. The company has a debt-to-equity ratio of 0.11, a current ratio of 3.85 and a quick ratio of 2.46. The company has a market cap of $3.73 billion, a P/E ratio of 51.50, a PEG ratio of 5.54 and a beta of 0.99. Mercury Systems has a one year low of $52.40 and a one year high of $88.96. The stock’s 50 day moving average is $69.71.

Mercury Systems (NASDAQ:MRCY) last posted its earnings results on Tuesday, May 4th. The technology company reported $0.64 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $0.62 by $0.02. The business had revenue of $256.86 million during the quarter, compared to the consensus estimate of $253.28 million. Mercury Systems had a return on equity of 7.77% and a net margin of 8.01%. Mercury Systems’s revenue was up 23.5% on a year-over-year basis. During the same quarter last year, the company earned $0.60 EPS. On average, sell-side analysts anticipate that Mercury Systems will post 1.95 EPS for the current year.

In related news, CAO Michelle M. Mccarthy sold 801 shares of Mercury Systems stock in a transaction on Thursday, June 3rd. The stock was sold at an average price of $65.31, for a total transaction of $52,313.31. Following the completion of the sale, the chief accounting officer now directly owns 9,478 shares of the company’s stock, valued at $619,008.18. The sale was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, CAO Michelle M. Mccarthy sold 793 shares of Mercury Systems stock in a transaction on Tuesday, March 16th. The stock was sold at an average price of $69.32, for a total value of $54,970.76. Following the sale, the chief accounting officer now directly owns 10,279 shares of the company’s stock, valued at $712,540.28. The disclosure for this sale can be found here. Insiders sold a total of 12,844 shares of company stock valued at $919,134 over the last three months. Insiders own 1.90% of the company’s stock.

A number of hedge funds have recently bought and sold shares of the business. Profund Advisors LLC lifted its holdings in Mercury Systems by 3.8% during the fourth quarter. Profund Advisors LLC now owns 4,524 shares of the technology company’s stock worth $398,000 after acquiring an additional 166 shares in the last quarter. Arizona State Retirement System lifted its holdings in Mercury Systems by 1.0% during the first quarter. Arizona State Retirement System now owns 16,303 shares of the technology company’s stock worth $1,152,000 after acquiring an additional 166 shares in the last quarter. Xponance Inc. lifted its holdings in Mercury Systems by 1.7% during the first quarter. Xponance Inc. now owns 10,619 shares of the technology company’s stock worth $750,000 after acquiring an additional 178 shares in the last quarter. Marco Investment Management LLC lifted its holdings in Mercury Systems by 8.0% during the first quarter. Marco Investment Management LLC now owns 3,025 shares of the technology company’s stock worth $214,000 after acquiring an additional 225 shares in the last quarter. Finally, Captrust Financial Advisors lifted its holdings in Mercury Systems by 6.2% during the first quarter. Captrust Financial Advisors now owns 4,382 shares of the technology company’s stock worth $310,000 after acquiring an additional 255 shares in the last quarter. Hedge funds and other institutional investors own 92.95% of the company’s stock.

Mercury Systems Company Profile

Mercury Systems, Inc, a technology company, manufactures and sells components, modules, and subsystems in the United States, Europe, and the Asia Pacific. The company's products and solutions are deployed in approximately 300 programs with 25 defense prime contractors and commercial aviation customers.

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