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On September 25, 2025 Mercury announced a $12.3 million development contract to build a cockpit communications subsystem for a new U.S. military aircraft. On October 22, 2025 the company disclosed a multi-year, cost-plus development contract to deliver a multi-mission, multi-domain subsystem that leverages the Mercury Processing Platform; both awards emphasize program-level adoption by defense primes and multi-year development scope.
Technical Analysis
ADX at 13.89 signals no established trend; directional indicators show DI+ increasing (21.0) while DI- decreases (23.32, decreasing), producing a bullish directional setup that lacks strength because ADX remains below 20.
MACD sits at -1.55 and has crossed above its signal line (-1.74) while the MACD trend increases, producing a bullish momentum cue despite the negative absolute MACD level; this suggests momentum has shifted toward buyers but remains shallow.
MRO reads 4.86 with a peak-and-reversal pattern; the positive MRO implies price currently sits above the model target and therefore faces a propensity to pull back toward fair-value levels, which moderates the bullish implications from the directional and MACD signals.
RSI at 49.26 with a peak-and-reversal indicates momentum faded from a recent high, aligning with the MRO signal and cautioning that upside may meet resistance absent rising momentum.
Price structure: last close $71.35 sits above the 20-day average ($68.48) and 12-day EMA ($69.49) but remains below the 50-day average ($74.98); the 200-day average ($58.42) stays well below price, showing longer-term support. Bollinger placement shows price above the 1x upper band ($70.38), indicating short-term extension toward the 2x band ($72.27) and raising the prospect of a near-term concession if momentum stalls.
Overhead technical resistance shows the Ichimoku Kijun-sen at $72.97 and a super-trend upper at $72.84; together these form a near-term cap above current price. Volume at 558,223 sits slightly below the 10-day average (562,661) and materially below the 50-/200-day averages, implying limited conviction behind the recent move. Short-term volatility reads elevated (42-day beta 2.06) versus the calmer 52-week beta of 0.78, suggesting swing activity may amplify intraperiod moves.
Fundamental Analysis
Top line: total revenue $225,209,000 with YoY revenue growth of -1.22% and QoQ revenue change of -160.03%, reflecting a pronounced sequential decline against a nearly flat year-over-year level; the YoY traction remains weak while quarter-to-quarter dynamics show large variability.
Profitability: EBIT sits at -$8,650,000 and EBITDA at $10,263,000; EBIT margin equals -3.84%. That EBIT margin sits well below the industry peer mean (17.98%) and below the industry peer median (19.90%), underscoring operating underperformance relative to peers. Operating margin at -2.86% and gross margin at 27.93% (up 10.24% YoY) indicate some gross-margin improvement but operating leverage has not yet returned margins to peer-normal levels.
Earnings and cash flow: GAAP net income registers -$12,515,000 while operating cash flow stands at $2,182,000 and free cash flow at -$4,366,000. EPS came in at $0.26 versus an estimate of $0.09, producing an EPS surprise of 188.9% (actual $0.26 vs estimate $0.09). Forward EPS sits at $0.2325, but free-cash-flow yield reads -0.10% and free cash flow remains negative, signaling constrained cash conversion despite an EPS beat.
Balance sheet and leverage: cash and short-term investments hold $304,716,000, supporting liquidity metrics—current ratio 3.37 and quick ratio 2.31, both above the industry peer mean for current ratio (2.64) and close to the peer mean for quick ratio (2.11). Total debt $645,130,000 produces debt-to-assets of 26.25%, modestly above the industry peer mean (22.96%), while debt-to-EBITDA sits at 62.86x, reflecting leverage relative to current EBITDA levels.
Operational efficiency: asset turnover at 0.092 (below the industry peer mean of 0.204) and receivables turnover 2.23 indicate lower asset utilization versus peers. R&D at $13,184,000 continues to support product development for defense programs but has yet to translate into consistent margin expansion.
Valuation context: multiples remain extended—PE ratio ~277.4 and price-to-sales ~19.03—contributing to the WMDST determination that the current valuation is over-valued given the company’s negative EBIT, negative free cash flow, and leverage profile.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-09-30 |
| REPORT DATE: | 2025-11-04 |
| NEXT REPORT DATE: | 2026-02-03 |
| CASH FLOW | Begin Period Cash Flow | $ 309.1 M |
| Operating Cash Flow | $ 2.2 M | |
| Capital Expenditures | $ -6.55 M | |
| Change In Working Capital | $ -16.94 M | |
| Dividends Paid | — | |
| Cash Flow Delta | $ -4.38 M | |
| End Period Cash Flow | $ 304.7 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 225.2 M | |
| Forward Revenue | $ -62.16 M | |
| COSTS | ||
| Cost Of Revenue | $ 162.3 M | |
| Depreciation | $ 8.7 M | |
| Depreciation and Amortization | $ 18.9 M | |
| Research and Development | $ 13.2 M | |
| Total Operating Expenses | $ 231.7 M | |
| PROFITABILITY | ||
| Gross Profit | $ 62.9 M | |
| EBITDA | $ 10.3 M | |
| EBIT | $ -8.65 M | |
| Operating Income | $ -6.45 M | |
| Interest Income | $ 2.0 M | |
| Interest Expense | $ 7.9 M | |
| Net Interest Income | $ -5.86 M | |
| Income Before Tax | $ -16.54 M | |
| Tax Provision | $ -4.02 M | |
| Tax Rate | 24.317 % | |
| Net Income | $ -12.52 M | |
| Net Income From Continuing Operations | $ -12.52 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.09 | |
| EPS Actual | $ 0.26 | |
| EPS Difference | $ 0.17 | |
| EPS Surprise | 188.889 % | |
| Forward EPS | $ 0.23 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 2.5 B | |
| Intangible Assets | $ 1.1 B | |
| Net Tangible Assets | $ 336.5 M | |
| Total Current Assets | $ 1.1 B | |
| Cash and Short-Term Investments | $ 304.7 M | |
| Cash | $ 304.7 M | |
| Net Receivables | $ 92.6 M | |
| Inventory | $ 340.2 M | |
| Long-Term Investments | $ 5.1 M | |
| LIABILITIES | ||
| Accounts Payable | $ 97.8 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 322.2 M | |
| Net Debt | $ 286.8 M | |
| Total Debt | $ 645.1 M | |
| Total Liabilities | $ 982.6 M | |
| EQUITY | ||
| Total Equity | $ 1.5 B | |
| Retained Earnings | $ 169.4 M | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 24.82 | |
| Shares Outstanding | 59.427 M | |
| Revenue Per-Share | $ 3.79 | |
| VALUATION | Market Capitalization | $ 4.3 B |
| Enterprise Value | $ 4.6 B | |
| Enterprise Multiple | 450.795 | |
| Enterprise Multiple QoQ | 463.223 % | |
| Enterprise Multiple YoY | 67.457 % | |
| Enterprise Multiple IPRWA | MRCY: 450.795 high: 230.414 median: 74.716 mean: 59.606 low: -197.639 |
|
| EV/R | 20.543 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 1.666 | |
| Asset To Liability | 2.501 | |
| Debt To Capital | 0.304 | |
| Debt To Assets | 0.263 | |
| Debt To Assets QoQ | -0.794 % | |
| Debt To Assets YoY | 55751.064 % | |
| Debt To Assets IPRWA | high: 0.788 median: 0.28 MRCY: 0.263 mean: 0.23 low: 0.002 |
|
| Debt To Equity | 0.437 | |
| Debt To Equity QoQ | 0.032 % | |
| Debt To Equity YoY | 57448.684 % | |
| Debt To Equity IPRWA | high: 1.475 median: 0.601 mean: 0.475 MRCY: 0.437 low: -0.674 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 2.906 | |
| Price To Book QoQ | 25.5 % | |
| Price To Book YoY | 107.607 % | |
| Price To Book IPRWA | high: 15.545 mean: 7.363 median: 6.409 MRCY: 2.906 low: -8.049 |
|
| Price To Earnings (P/E) | 277.4 | |
| Price To Earnings QoQ | 156.011 % | |
| Price To Earnings YoY | -68.257 % | |
| Price To Earnings IPRWA | high: 383.521 MRCY: 277.4 median: 124.306 mean: 98.557 low: -251.079 |
|
| PE/G Ratio | -6.208 | |
| Price To Sales (P/S) | 19.032 | |
| Price To Sales QoQ | 52.351 % | |
| Price To Sales YoY | 90.41 % | |
| Price To Sales IPRWA | high: 84.038 median: 20.662 MRCY: 19.032 mean: 17.715 low: 0.0 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 277.126 | |
| Forward PE/G | -6.202 | |
| Forward P/S | -68.954 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 7.539 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.092 | |
| Asset Turnover Ratio QoQ | -18.262 % | |
| Asset Turnover Ratio YoY | 6.921 % | |
| Asset Turnover Ratio IPRWA | high: 0.503 median: 0.235 mean: 0.204 MRCY: 0.092 low: 0.001 |
|
| Receivables Turnover | 2.227 | |
| Receivables Turnover Ratio QoQ | -13.153 % | |
| Receivables Turnover Ratio YoY | 28.549 % | |
| Receivables Turnover Ratio IPRWA | high: 3.347 MRCY: 2.227 mean: 1.45 median: 1.405 low: 0.271 |
|
| Inventory Turnover | 0.482 | |
| Inventory Turnover Ratio QoQ | -12.226 % | |
| Inventory Turnover Ratio YoY | 8.422 % | |
| Inventory Turnover Ratio IPRWA | high: 2.365 median: 1.192 mean: 1.052 MRCY: 0.482 low: 0.134 |
|
| Days Sales Outstanding (DSO) | 40.971 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 161.184 | |
| Cash Conversion Cycle Days QoQ | -16.58 % | |
| Cash Conversion Cycle Days YoY | -15.487 % | |
| Cash Conversion Cycle Days IPRWA | high: 384.751 MRCY: 161.184 mean: 114.907 median: 85.242 low: -90.357 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 0.295 | |
| CapEx To Revenue | -0.029 | |
| CapEx To Depreciation | -0.757 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 2.1 B | |
| Net Invested Capital | $ 2.1 B | |
| Invested Capital | $ 2.1 B | |
| Net Tangible Assets | $ 336.5 M | |
| Net Working Capital | $ 762.4 M | |
| LIQUIDITY | ||
| Cash Ratio | 0.946 | |
| Current Ratio | 3.366 | |
| Current Ratio QoQ | -4.438 % | |
| Current Ratio YoY | -17.879 % | |
| Current Ratio IPRWA | high: 11.805 MRCY: 3.366 mean: 2.64 median: 2.07 low: 0.373 |
|
| Quick Ratio | 2.31 | |
| Quick Ratio QoQ | -4.31 % | |
| Quick Ratio YoY | -10.838 % | |
| Quick Ratio IPRWA | high: 9.468 MRCY: 2.31 mean: 2.11 median: 1.518 low: 0.295 |
|
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 62.86 | |
| Cost Of Debt | 0.926 % | |
| Interest Coverage Ratio | -1.097 | |
| Interest Coverage Ratio QoQ | -132.796 % | |
| Interest Coverage Ratio YoY | -31.268 % | |
| Interest Coverage Ratio IPRWA | high: 88.732 median: 18.766 mean: 13.701 MRCY: -1.097 low: -113.26 |
|
| Operating Cash Flow Ratio | 0.108 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 42.861 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 0.938 % | |
| Revenue Growth | -17.538 % | |
| Revenue Growth QoQ | -160.031 % | |
| Revenue Growth YoY | -1.222 % | |
| Revenue Growth IPRWA | high: 79.411 % median: 9.63 % mean: 6.637 % MRCY: -17.538 % low: -44.732 % |
|
| Earnings Growth | -44.681 % | |
| Earnings Growth QoQ | -106.539 % | |
| Earnings Growth YoY | -48.445 % | |
| Earnings Growth IPRWA | high: 164.706 % median: 14.815 % mean: 9.417 % MRCY: -44.681 % low: -200.0 % |
|
| MARGINS | ||
| Gross Margin | 27.929 % | |
| Gross Margin QoQ | -10.017 % | |
| Gross Margin YoY | 10.243 % | |
| Gross Margin IPRWA | high: 97.907 % mean: 41.13 % median: 38.088 % MRCY: 27.929 % low: -43.101 % |
|
| EBIT Margin | -3.841 % | |
| EBIT Margin QoQ | -139.078 % | |
| EBIT Margin YoY | -44.75 % | |
| EBIT Margin IPRWA | high: 44.499 % median: 19.896 % mean: 17.979 % MRCY: -3.841 % low: -228.471 % |
|
| Return On Sales (ROS) | -2.864 % | |
| Return On Sales QoQ | -131.455 % | |
| Return On Sales YoY | -58.803 % | |
| Return On Sales IPRWA | high: 44.617 % median: 18.276 % mean: 17.524 % MRCY: -2.864 % low: -228.471 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ -4.37 M | |
| Free Cash Flow Yield | -0.102 % | |
| Free Cash Flow Yield QoQ | -110.241 % | |
| Free Cash Flow Yield YoY | -90.029 % | |
| Free Cash Flow Yield IPRWA | high: 2.804 % median: 0.858 % mean: 0.444 % MRCY: -0.102 % low: -13.716 % |
|
| Free Cash Growth | -112.85 % | |
| Free Cash Growth QoQ | -373.788 % | |
| Free Cash Growth YoY | -15.799 % | |
| Free Cash Growth IPRWA | high: 288.449 % median: 8.386 % mean: -18.248 % MRCY: -112.85 % low: -351.784 % |
|
| Free Cash To Net Income | 0.349 | |
| Cash Flow Margin | 15.412 % | |
| Cash Flow To Earnings | -2.773 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | -0.512 % | |
| Return On Assets QoQ | -175.852 % | |
| Return On Assets YoY | -30.623 % | |
| Return On Assets IPRWA | high: 6.668 % mean: 2.62 % median: 2.338 % MRCY: -0.512 % low: -24.617 % |
|
| Return On Capital Employed (ROCE) | -0.405 % | |
| Return On Equity (ROE) | -0.008 | |
| Return On Equity QoQ | -176.328 % | |
| Return On Equity YoY | -29.333 % | |
| Return On Equity IPRWA | high: 0.289 mean: 0.059 median: 0.059 MRCY: -0.008 low: -0.264 |
|
| DuPont ROE | -0.849 % | |
| Return On Invested Capital (ROIC) | -0.317 % | |
| Return On Invested Capital QoQ | -128.028 % | |
| Return On Invested Capital YoY | -104.62 % | |
| Return On Invested Capital IPRWA | high: 9.897 % mean: 3.588 % median: 2.823 % MRCY: -0.317 % low: -14.977 % |
|