We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Mercury Systems (MRCY) Down 10.2% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Mercury Systems (MRCY - Free Report) . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Mercury Systems due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Mercury Systems Inc before we dive into how investors and analysts have reacted as of late.
Mercury Systems Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Mercury Systems reported adjusted earnings of 26 cents per share for the first quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 225%. The bottom line increased significantly year over year from 4 cents per share in the prior year quarter.
In the fiscal first quarter, MRCY reported revenues of $225.2 million, reflecting a 10.2% year-over-year increase and surpassing the Zacks Consensus Estimate by 8.78%.
MRCY's Q1 Details
Total bookings for the first quarter of fiscal 2026 were $250.2 million, yielding a book-to-bill ratio of 1.11 for the quarter. As a defense technology company focused on mission-critical processing systems, Mercury Systems operates primarily as a single segment business serving aerospace and defense markets.
MRCY achieved a record backlog of $1.4 billion with a healthy 1.11 book-to-bill ratio.
MRCY's Q1 Operating Details
First quarter fiscal 2026 adjusted EBITDA was $35.6 million, compared to $21.5 million for the first quarter of fiscal 2025. The adjusted EBITDA margin was 15.8%, representing a significant improvement of 530 basis points year-over-year. GAAP net loss and diluted loss per share for the first quarter of fiscal 2026 were $12.5 million, and 21 cents, respectively, compared to GAAP net loss and loss per share of $17.5 million, and 30 cents, respectively, for the first quarter of fiscal 2025.
Balance Sheet & Cash Flow
As of Sept. 26, 2025, cash and cash equivalents totaled $304.7 million, which decreased from $309.1 million as of June 27, 2025. The long-term debt was $591.5 million, unchanged from the prior quarter. In the reported quarter, cash flow from operations was $2.2 million compared with negative $14.7 million in the prior year quarter. In the first quarter of fiscal 2026, free cash flow was negative $4.4 million compared to negative $20.9 million for the first quarter of fiscal 2025.
MRCY Offers Fiscal 2026 Guidance
The company projects low single-digit revenue growth for fiscal 2026, with adjusted EBITDA margins expected to approach mid-teens for the fiscal year. Mercury anticipates being free cash flow positive in fiscal 2026, with stronger performance expected in the second half of the year. The company continues to make progress toward its long-term target profile of above-market top-line growth, adjusted EBITDA margins in the low to mid-20% range, and free cash flow conversion of 50%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -1200% due to these changes.
VGM Scores
Currently, Mercury Systems has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Mercury Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Mercury Systems belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Hexcel (HXL - Free Report) , has gained 8.2% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Hexcel reported revenues of $456.2 million in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $0.37 for the same period compares with $0.47 a year ago.
Hexcel is expected to post earnings of $0.52 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -3.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hexcel. Also, the stock has a VGM Score of D.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Mercury Systems (MRCY) Down 10.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Mercury Systems (MRCY - Free Report) . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Mercury Systems due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Mercury Systems Inc before we dive into how investors and analysts have reacted as of late.
Mercury Systems Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Mercury Systems reported adjusted earnings of 26 cents per share for the first quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 225%. The bottom line increased significantly year over year from 4 cents per share in the prior year quarter.
In the fiscal first quarter, MRCY reported revenues of $225.2 million, reflecting a 10.2% year-over-year increase and surpassing the Zacks Consensus Estimate by 8.78%.
MRCY's Q1 Details
Total bookings for the first quarter of fiscal 2026 were $250.2 million, yielding a book-to-bill ratio of 1.11 for the quarter. As a defense technology company focused on mission-critical processing systems, Mercury Systems operates primarily as a single segment business serving aerospace and defense markets.
MRCY achieved a record backlog of $1.4 billion with a healthy 1.11 book-to-bill ratio.
MRCY's Q1 Operating Details
First quarter fiscal 2026 adjusted EBITDA was $35.6 million, compared to $21.5 million for the first quarter of fiscal 2025. The adjusted EBITDA margin was 15.8%, representing a significant improvement of 530 basis points year-over-year. GAAP net loss and diluted loss per share for the first quarter of fiscal 2026 were $12.5 million, and 21 cents, respectively, compared to GAAP net loss and loss per share of $17.5 million, and 30 cents, respectively, for the first quarter of fiscal 2025.
Balance Sheet & Cash Flow
As of Sept. 26, 2025, cash and cash equivalents totaled $304.7 million, which decreased from $309.1 million as of June 27, 2025. The long-term debt was $591.5 million, unchanged from the prior quarter. In the reported quarter, cash flow from operations was $2.2 million compared with negative $14.7 million in the prior year quarter. In the first quarter of fiscal 2026, free cash flow was negative $4.4 million compared to negative $20.9 million for the first quarter of fiscal 2025.
MRCY Offers Fiscal 2026 Guidance
The company projects low single-digit revenue growth for fiscal 2026, with adjusted EBITDA margins expected to approach mid-teens for the fiscal year. Mercury anticipates being free cash flow positive in fiscal 2026, with stronger performance expected in the second half of the year. The company continues to make progress toward its long-term target profile of above-market top-line growth, adjusted EBITDA margins in the low to mid-20% range, and free cash flow conversion of 50%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -1200% due to these changes.
VGM Scores
Currently, Mercury Systems has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Mercury Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Mercury Systems belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Hexcel (HXL - Free Report) , has gained 8.2% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Hexcel reported revenues of $456.2 million in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $0.37 for the same period compares with $0.47 a year ago.
Hexcel is expected to post earnings of $0.52 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -3.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hexcel. Also, the stock has a VGM Score of D.