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↓Deteriorating
- Quality Below Minimum Threshold↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Mercury Systems Inc (MRCY) Stock Analysis
Range Bound setup
Industrials · Aerospace & Defense
Sell if holding. Engine safety override at $82.18: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.8/10 and A.R:R 2.7:1 is above the 1.5:1 BUY gate. Specifically: Elevated put/call ratio: 1.71; Below-average business quality; Negative price momentum.
Mercury Systems designs and manufactures mission-critical processing components, modules, and integrated subsystems for aerospace and defense applications — sensor and radar processing, electronic warfare, avionics, and C4I — selling primarily as a subcontractor to top U.S. and... Read more
Sell if holding. Engine safety override at $82.18: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.8/10 and A.R:R 2.7:1 is above the 1.5:1 BUY gate. Specifically: Elevated put/call ratio: 1.71; Below-average business quality; Negative price momentum. Chart setup: RSI 49 mid-range, Bollinger mid-band. Score 4.8/10, moderate confidence.
Passes 6/8 gates (favorable risk/reward ratio, no SEC red flags, news events none recent, earnings proximity 39d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and clean insider activity. Suitability: moderate.
About Mercury Systems Inc
About Mercury Systems Inc
Mercury Systems generated $912.0 million in net revenues in fiscal 2025, with sales to the U.S. government, foreign governments, and defense prime contractors accounting for approximately 97% of that total, supported by what the company describes as a record order backlog. The company's largest individually named customers were RTX Corporation at 13%, and Lockheed Martin and the U.S. Navy at 10% each, while international operations contributed just 5% of revenue, reflecting a business concentrated almost entirely in U.S. defense electronics.
Mercury sells components, modules, and integrated subsystems — spanning signal processing, compute, data management, display, and security product lines — that defense prime contractors and, in some cases, the U.S. government integrate directly into larger weapons and sensor platforms. Revenue splits between a product model, where Mercury invests its own R&D to build capabilities reusable across multiple customers, and a solutions model, where it develops custom capabilities for a specific program through a multi-year development-then-production cycle. A substantial share of the business runs on fixed-price contracts, where changes in estimates of completion can swing margins, and gross margins on development-contract revenue run structurally lower than on standard product sales. The company outsourced its former Swiss manufacturing operations to Cicor Group during fiscal 2025 and relies on contract manufacturers for hardware sub-assemblies, while continuing to manufacture other products onshore as part of its 'trusted and secure' supply-chain positioning.
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Beyond its named corporate customers, Mercury's revenue is tied to the fate of a handful of major weapons programs: the 10-K identifies F-35, F/A-18, KC-46, LTAMDS, SCAR, and THAAD as programs it expects to comprise a large portion of future revenues, and states that the loss or cancellation of any of them could adversely affect results. Even so, the company notes no single program currently contributes more than 10% of annual revenue, and it relies on sole-source suppliers for critical components such as FPGAs, ASICs, processors, memory products, and specialty glass — any of which could disrupt deliveries if a vendor exits with the 30- to 180-day notice its contracts typically allow.
See also: Industrials · Aerospace & Defense
From Mercury Systems Inc's most recent 10-K filing, extracted August 30, 2026.
Recent developments
updated 2026-09-25Recent Developments — Mercury Systems Inc
Latest news
- NEWS Here's How Much $1000 Invested In Mercury System 20 Years Ago Would Be Worth Today — benzinga Sep 24, 2026 positive
- NEWS Mercury Systems Says Massachusetts Court Grants Preliminary Approval Of Settlement In Stockholder Derivative Lawsuits — benzinga Sep 18, 2026 negative
- NEWS Here's How Much $100 Invested In Mercury System 20 Years Ago Would Be Worth Today — benzinga Sep 16, 2026 positive
- 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
Generated 2026-09-25T20:57:26Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerU.S. and foreign government defense programs97%10-K Item 1A: 'Sales of our products and services, primarily as a subcontractor or team member with defense prime contractors, and in some cases directly, 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 and both Lockheed Martin and U. S. Navy accounted for 10% of our total net revenues.'
- LOWCustomerLockheed Martin10%10-K Item 1A: 'In fiscal 2025, RTX Corporation accounted for 13% of our total net revenues and both Lockheed Martin and U. S. Navy accounted for 10% of our total net revenues.'
- LOWCustomerU.S. Navy10%10-K Item 1A: 'In fiscal 2025, RTX Corporation accounted for 13% of our total net revenues and both Lockheed Martin and U. S. Navy accounted for 10% of our total net revenues.'
- HIGHSuppliersole-source suppliers (FPGAs, ASICs, processors, memory, specialty glass)10-K Item 1A: 'Several components used in our products are currently obtained from sole-source suppliers. We are dependent on a limited number of key vendors for certain critical components such as FPGAs, ASICS, processors, memory products and specialty glass.'
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
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 action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $82.18: a dimension score below its floor triggers a hard block regardless of the otherwise-positive setup — overall score 4.8/10 and A.R:R 2.7:1 is above the 1.5:1 BUY gate. Specifically: Elevated put/call ratio: 1.71; Below-average business quality; Negative price momentum. Chart setup: RSI 49 mid-range, Bollinger mid-band. Prior stop was $76.43. Score 4.8/10, moderate confidence.
Take-profit target: $100.66 (+22.5% upside). Prior stop was $76.43. Stop-loss: $76.43.
Concentration risk — Customer: U.S. and foreign government defense programs (97.0%); Concentration risk — Supplier: sole-source suppliers (FPGAs, ASICs, processors, memory, specialty glass); Quality below floor (3.2 < 4.0).
Mercury Systems Inc trades at a P/E of N/A (forward 37.3). TrendMatrix value score: 6.8/10. 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, and integrated subsystems for...
Mercury Systems designs and manufactures mission-critical processing components, modules, and integrated subsystems for aerospace and defense applications — sensor and radar processing, electronic warfare, avionics, and C4I — selling primarily as a subcontractor to top U.S. and European defense prime contractors and directly to the U.S. government. Sales to the U.S. and foreign governments made up approximately 97% of the company's $912.0 million in fiscal 2025 net revenues.