How Mercury Systems Inc. (MRCY) Works From A Technical Perspective

Mercury Systems Inc. (NASDAQ:MRCY) finished Friday with a subtraction of -$0.6 to close at $52.72, a downside of -1.13 percent. An average of 403,720 shares of common stock have been traded in the last five days. There was a gain of $2.63 in the past week, and it reached a new high 13 times over the past 12 months. The last 20 days have seen an average of 479,890 shares traded, while the 50-day average volume stands at 476,898.

MRCY stock has increased by 13.33% in the last month. The company shares reached their 1-month lowest point of $44.44 on 09/23/21. With the stock rallying to its 52-week high on 01/04/21, shares of the company touched a low of $44.44 and a high of $88.96 in 52 weeks. It has reached a new high 1 time so far this year and lost -40.13% or -$35.34 in price. In spite of this, the price is down -40.74% from the 52-week high.

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Insider Transactions

142 days have passed since Mercury Systems Inc. (MRCY) last reported insider trading activity. McCarthy Michelle M, who is VP, CAO, most recently acquired $801 shares at $65.31 per share on Jun 03. In this transaction, the insider spent $52,317. President and CEO, ASLETT MARK, disposed of 1,250 shares at a price of $76.54 on Apr 22. The insider now owns more than $95,674 worth of shares. Prior to that, President and CEO ASLETT MARK went on to Sale 1,250 shares at $77.24 each on Apr 21. An amount of $96,544 was transacted.

Valuation Metrics

Mercury Systems Inc. (MRCY) has a trailing price-to-earnings (P/E) ratio of 47.16, which compares with the 18.50 for the broader industry and 29.83 for the sector. In the last five years, Mercury Systems Inc.’s PE ratio has ranged between 92.77 and 37.76. The stock’s beta is 1.01. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.28, the price-to-book (PB) ratio at 1.96, and the price-to-cash flow ratio at 58.81.

The quick ratio of Mercury Systems Inc. for the three months ended June 29 was 2.80, and the current ratio was 4.30, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.13 and a total debt to equity ratio of 0.13 for the quarter ending June 29. Mercury Systems Inc.’s EBITDA margin for the year ending June 29 is 18.75%, while its operating margin for the same period stands at 8.70%. Its gross profit as reported stood at $385.19 million compared to revenue of $924.0 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Mercury Systems Inc.’s return on assets was 3.30%. For the broader industry, ROE averaged 8.06 over the past year.

Earnings Surprise

For the three-month period that ended June 29, Mercury Systems Inc. had $200.0 million in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $17.93 million in the quarter, while revenues of $15.64 million were shrunk -104.57%. The analyst consensus anticipated Mercury Systems Inc.’s latest quarter earnings to come in at $0.67 per share, but it turned out to be $0.73, a 9.00% surprise. For the quarter, EBITDA amounted to $43.25 million. Shareholders own equity worth $56.23 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Mercury Systems Inc. (MRCY) price momentum. RSI 9-day as of the close on 22 October was 73.50%, suggesting the stock is Overbought, with historical volatility in this time frame at 28.14%.

As of today, MRCY’s price is $52.31 +5.25% or $2.63 from its 5-day moving average. MRCY is currently trading +12.48% higher than its 20-day SMA and -19.82% lower than its 100-day SMA. However, the stock’s current price level is -1.27% below the SMA50 and -33.69% below the SMA200.

The stochastic %K and %D were 94.72% and 94.27%, respectively, and the average true range (ATR) was 1.14. With the 14-day stochastic at 86.96% and the average true range at 1.17, the RSI (14) stands at 67.58%. The stock has reached 1.78 on the 9-day MACD Oscillator while the 14-day reading was at 2.85.

Analyst Ratings

RBC Capital Mkts launched coverage on Mercury Systems Inc. (NASDAQ: MRCY) in its analyst report released on October 22, 2021. The firm assigned the stock a a Sector perform rating. The consensus rating for Mercury Systems Inc. (MRCY) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell MRCY, while 5 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 4 others rate it as a “buy”.

What is MRCY’s price target for the next 12 months?

Analysts predict a range of price targets between $52.00 and $75.00, with a median target of $65.00. Taking a look at these predictions, the average price target given by analysts for Mercury Systems Inc. (MRCY) stock is $63.11.


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