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Mercury's EW Efforts Continue, Wins Another Follow-On Order

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Mercury Systems, Inc. (MRCY - Free Report) recently received a $6.7 million follow-on order for its high-performance subsystems for a naval electronic warfare (EW) application. The initial order was placed in the September quarter.

The order, received from a defense prime contractor, underscores Mercury’s leadership in the market for affordable radio frequency (RF) and digital microelectronics solutions. Mercury specializes in delivering critical EW information.

Expanding Electronic Warfare Portfolio

Mercury has been focused on its efforts in the EW segment with new innovations and products. It recently launched the EnsembleSeries DCM6111 6U VPX digital transceiver, which incorporates BuiltSECURE technology and is based on the OpenVPX standard. It is suitable for advanced electronic warfare applications operating in high threat areas.

Notably, Mercury is involved in two major programs related to SEWIP — SEWIP Block 2 and SEWIP Block 3. Management stated that Block 2 is a well-funded program and is expected to be one of the largest revenue drivers.

However, SEWIP Block 3 has experienced some delays and is expected to get some funding this fiscal year.

Orders & Accolades Keep Flowing

Mercury bagged a string of deals of significant value in the last reported quarter. These include a $5 million order for rugged, embedded processing subsystems for shipboard radar processing and a $20.5 million follow-on order to provide integrated subsystems to the U.S. Navy. It also secured a $9.2 million follow-on order from a defense prime contractor for custom-designed radiation-tolerant SSDs, a $6.7 million follow-on order for BuiltSECURE and a $3.6 million order to incorporate high-performance RF microelectronics into a naval radar system.

In total, the company bagged around 12 orders including follow-on orders in the fiscal first quarter. Notably, during the quarter, it was included in Fortune magazine's 2018 100 Fastest-Growing Companies list.

Price Performance

Mercury’s shares have outperformed the industry on a year-to-date basis with an average loss of 7.5% compared with the industry’s decline of 22.6%. Driven by such wins and efforts, we believe the shares of the company to rebound, going forward.



Zacks Rank and Other Stocks to Consider

Mercury currently has a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader technology sector are Stratasys, Ltd. (SSYS - Free Report) , Intel Corporation (INTC - Free Report) and Castlight Health (CSLT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Stratasys, Intel and Castlight is projected to be 15.75%, 8.42% and 22.5%, respectively.
 
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