Quality metrics fall below the minimum acceptable threshold and the risk/reward geometry turns unfavorable at current prices, while near-total dependence on government customers amplifies program risk; only four consecutive earnings beats—with an average positive surprise near 186%—offer a counterweight to an otherwise challenged setup.
Thesis pillars
- Unattractive Reward Risk Geometry→Stable
- Government Customer Concentration Fragility↑Improving
- Quality Below Minimum Threshold↑Improving
- +1 more pillar — see the Why tab for full reasoning
Mercury Systems Inc (MRCY) Stock Analysis
Industrials · Aerospace & Defense
Sell if holding. Engine safety override at $80.87: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.5/10 and A.R:R 2.8:1 is above the 1.5:1 BUY gate. Specifically: High short interest: 10%; Below-average business quality; Negative price momentum.
Mercury Systems designs and manufactures mission-critical processing components, modules, subsystems and integrated solutions -- spanning signal processing, compute, data management, display and security -- for aerospace and defense applications such as radar, electronic... Read more
Sell if holding. Engine safety override at $80.87: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.5/10 and A.R:R 2.8:1 is above the 1.5:1 BUY gate. Specifically: High short interest: 10%; Below-average business quality; Negative price momentum. Chart setup: No clear chart pattern; technical signals are mixed. Score 4.5/10, moderate confidence.
Passes 6/8 gates (favorable risk/reward ratio, no SEC red flags, news events none recent, earnings proximity 53d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and clean insider activity. Suitability: aggressive.
About Mercury Systems Inc
About Mercury Systems Inc
Mercury Systems generated $912.0 million in revenue for fiscal 2025, with sales to the U.S. government and foreign governments -- made largely as a subcontractor to defense prime contractors -- accounting for approximately 97% of total net revenues. RTX Corporation was Mercury's largest named customer at 13% of net revenues, followed by Lockheed Martin and the U.S. Navy at 10% each, while international operations contributed just 5% of revenue.
Mercury operates a product model, where internal R&D funds capabilities sold across multiple customers, and a solutions model, where it develops mission-specific capabilities under multi-year development-to-production contracts; both models are organized within a single integrated operating unit spanning Signal Technologies, Processing Technologies, Integrated Processing Solutions, and an international unit with facilities in the U.K., Spain and Switzerland. The company expects the F-35, F/A-18, KC-46, LTAMDS, SCAR, and THAAD programs to represent a large portion of future revenue. Several components used in its products -- including FPGAs, ASICs, processors, memory products and specialty glass -- come from sole-source suppliers, and Mercury also relies on contract manufacturers for hardware sub-assemblies, having outsourced its former Swiss manufacturing operations to Cicor Group during fiscal 2025. Firm fixed-price contracts limit Mercury's ability to pass through labor, material and tariff cost inflation to the government and its prime-contractor customers.
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Mercury's government-contract concentration carries a funding-timing risk distinct from the headline revenue share: because Congress appropriates most defense funds on an annual basis even for multi-year procurements, individual programs are often only partially funded at the outset, and a reduction, delay, or termination of appropriations for any program can cut off revenue regardless of Mercury's product performance. The 10-K flags that the U.S. defense budget frequently operates under continuing budget resolutions, and that the potential for congressional gridlock, sequestration, or a government shutdown in fiscal 2026 and beyond could adversely affect revenue timing. On a limited number of programs, customers also hold co-manufacturing rights that could shift production away from Mercury entirely.
See also: Industrials · Aerospace & Defense
From Mercury Systems Inc's most recent 10-K filing, extracted September 6, 2026.
Recent developments
updated 2026-09-11Recent Developments — Mercury Systems Inc
Latest news
- NEWS Here's How Much $1000 Invested In Mercury System 20 Years Ago Would Be Worth Today — benzinga Aug 24, 2026 neutral
- NEWS Benzinga Bulls and Bears: Ross, Moderna, Webull — benzinga Aug 22, 2026 neutral
- NEWS Truist Securities Maintains Buy on Mercury System, Raises Price Target to $120 — benzinga Aug 20, 2026 positive
- NEWS RBC Capital Maintains Outperform on Mercury System, Raises Price Target to $120 — benzinga Aug 19, 2026 positive
- NEWS Stock Market Futures Mixed: Dow Jones Gains, Nasdaq 100 Drops as Trump Says 'No Talks' Are Happening With Iran— Keysight — benzinga Aug 19, 2026 neutral
Generated 2026-09-14T20:47:04Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerU.S. government and foreign governments97%10-K Item 1A: 'to the U.S. government, as well as foreign governments, ... accounted for approximately 97%, 95% and 98% of our total net revenues in fiscal years 2025, 2024 and 2023, respectively.'
- LOWCustomerRTX Corporation13%10-K Item 1A: 'In fiscal 2025, RTX Corporation accounted for 13% of our total net revenues'
- LOWCustomerLockheed Martin10%10-K Item 1A: 'both Lockheed Martin and U. S. Navy accounted for 10% of our total net revenues'
- LOWCustomerU.S. Navy10%10-K Item 1A: 'both Lockheed Martin and U. S. Navy accounted for 10% of our total net revenues'
- HIGHSuppliersole-source suppliers10-K Item 1A: 'Several components used in our products are currently obtained from sole-source suppliers.'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
3 floor-breakers
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Unprofitable operations — net margin -3.0%. Quality floor flags this regardless of sector context.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $80.87: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.5/10 and A.R:R 2.8:1 is above the 1.5:1 BUY gate. Specifically: High short interest: 10%; Below-average business quality; Negative price momentum. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $77.19. Score 4.5/10, moderate confidence.
Take-profit target: $100.73 (+24.6% upside). Prior stop was $77.19. Stop-loss: $77.19.
Concentration risk — Customer: U.S. government and foreign governments (97.0%); Concentration risk — Supplier: sole-source suppliers; Quality below floor (3.2 < 4.0).
Mercury Systems Inc trades at a P/E of N/A (forward 36.0). TrendMatrix value score: 6.9/10. Verdict: Sell.
17 analysts cover MRCY with a consensus score of 3.9/5. Average price target: $116.
What does Mercury Systems Inc do?Mercury Systems designs and manufactures mission-critical processing components, modules, subsystems and integrated...
Mercury Systems designs and manufactures mission-critical processing components, modules, subsystems and integrated solutions -- spanning signal processing, compute, data management, display and security -- for aerospace and defense applications such as radar, electronic warfare, avionics and C4I systems. The company sells largely as a subcontractor to U.S. and European defense prime contractors and directly to the U.S. government, with sales to U.S. and foreign governments accounting for approximately 97% of its $912.0 million in fiscal 2025 revenue. Mercury's largest named customers were RTX