Mercury Systems Inc

MRCY

Electronic Components & Accessories

Mkt Cap

$1.803B

PE

-13.34

Debt

$616.5M

Cash

$142.6M

EV

$2.276B

FCF

-$31.56M

Market Cap

$1.803B

P/E Ratio

-13.34

Debt

$616.5M

Cash

$142.6M

EV

$2.276B

FCF

-$31.56M

Charts data: {"Earnings":[{"time":"2014-06-29","value":-11425000},{"time":"2015-06-29","value":10369000},{"time":"2016-06-29","value":19742000},{"time":"2017-06-29","value":24875000},{"time":"2018-06-29","value":40883000},{"time":"2019-06-29","value":46775000},{"time":"2020-07-02","value":85712000},{"time":"2021-07-01","value":62044000},{"time":"2022-06-30","value":11275000},{"time":"2023-06-29","value":-28335000}],"Sales":[{"time":"2014-06-29","value":208729000},{"time":"2015-06-29","value":234847000},{"time":"2016-06-29","value":270154000},{"time":"2017-06-29","value":408588000},{"time":"2018-06-29","value":493184000},{"time":"2019-06-29","value":654744000},{"time":"2020-07-02","value":796610000},{"time":"2021-07-01","value":923996000},{"time":"2022-06-30","value":988197000},{"time":"2023-06-29","value":973882000}],"Net Margins":[{"time":"2014-06-29","value":-0.054736045302760994},{"time":"2015-06-29","value":0.04415215012327175},{"time":"2016-06-29","value":0.07307683765555942},{"time":"2017-06-29","value":0.060880397857988974},{"time":"2018-06-29","value":0.08289603880093434},{"time":"2019-06-29","value":0.07144013538115661},{"time":"2020-07-02","value":0.10759593778636974},{"time":"2021-07-01","value":0.06714747682890403},{"time":"2022-06-30","value":0.011409668315123401},{"time":"2023-06-29","value":-0.029094900614242792}],"Assets":[{"time":"2014-06-29","value":373712000},{"time":"2015-06-29","value":389988000},{"time":"2016-06-29","value":736496000},{"time":"2017-06-29","value":815745000},{"time":"2018-06-29","value":1064480000},{"time":"2019-06-29","value":1416977000},{"time":"2020-07-02","value":1610720000},{"time":"2021-07-01","value":1955137000},{"time":"2022-06-30","value":2304415000},{"time":"2023-06-29","value":2391367000}],"Stockholders Equity":[{"time":"2014-06-29","value":327147000},{"time":"2015-06-29","value":350138000},{"time":"2016-06-29","value":473044000},{"time":"2017-06-29","value":725417000},{"time":"2018-06-29","value":771891000},{"time":"2019-06-29","value":1284739000},{"time":"2020-07-02","value":1384784000},{"time":"2021-07-01","value":1484146000},{"time":"2022-06-30","value":1537185000},{"time":"2023-06-29","value":1566685000}],"ROE":[{"time":"2014-06-29","value":-0.03492313852794004},{"time":"2015-06-29","value":0.029614037893630513},{"time":"2016-06-29","value":0.04173396132283678},{"time":"2017-06-29","value":0.03429062180787051},{"time":"2018-06-29","value":0.052964732067092374},{"time":"2019-06-29","value":0.036408173177587044},{"time":"2020-07-02","value":0.06189557360570313},{"time":"2021-07-01","value":0.04180451249405382},{"time":"2022-06-30","value":0.007334836080237577},{"time":"2023-06-29","value":-0.018085958568569944}],"ROA":[{"time":"2014-06-29","value":-0.015691227469281158},{"time":"2015-06-29","value":0.04828097274787942},{"time":"2016-06-29","value":0.03592415980534857},{"time":"2017-06-29","value":0.04736284010321853},{"time":"2018-06-29","value":0.04413892229069593},{"time":"2019-06-29","value":0.054047454545839486},{"time":"2020-07-02","value":0.05894196384225688},{"time":"2021-07-01","value":0.04142983330579903},{"time":"2022-06-30","value":0.013717147302026762},{"time":"2023-06-29","value":-0.009068035144751935}]}

Mercury Systems, Inc., a technology company, manufactures and sells components, products, modules, and subsystems for aerospace and defense industries in the United States, Europe, and the Asia Pacific. Its products and solutions are deployed in approximately 300 programs with 25 defense contractors and commercial aviation customers. The company offers components, including power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; modules and sub-assemblies, such as embedded processing modules and boards, switched fabric boards, digital receiver boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video processing, and Ethernet and input-output boards; and integrated subsystems. It also designs and develops digital radio frequency memory units for various modern electronic warfare applications; radar environment simulation and test systems for defense and intelligence applications; and signals intelligence payloads and EO/IR technologies for small UAV platforms, as well as onboard UAV processor systems for real-time wide area motion imagery. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. Mercury Systems, Inc. was incorporated in 1981 and is headquartered in Andover, Massachusetts.

Sector

10-Q
9/29/23
10-K
6/30/23
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3/31/23
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12/30/22
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10-Q
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10-K
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10-Q
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10-Q
9/30/18
10-K
6/30/18
10-Q
3/31/18
10-Q
12/31/17

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 7.3%

Earnings Stability -12%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	06-2015	06-2016	06-2017	06-2018	06-2019	07-2020	07-2021	06-2022	06-2023	TTM
Net Margin	4.4%	7.3%	6.1%	8.3%	7.1%	11%	6.7%	1.1%	-2.9%	-16%
ROA	4.8%	3.6%	4.7%	4.4%	5.4%	5.9%	4.1%	1.4%	-0.91%	-6.3%
ROE	3%	4.2%	3.4%	5.3%	3.6%	6.2%	4.2%	0.73%	-1.8%	-9.2%

What is the average Net Margin?

The average Net Margin over the past 5 years is +5.19%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -2.23%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +3.39%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.16%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +3.04%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -1.32%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	06-2015	06-2016	06-2017	06-2018	06-2019	07-2020	07-2021	06-2022	06-2023	TTM
Debt FCF	0.00	7.23	0.00	6.91	0.00	0.00	3.87	-9.70	-8.52	-19.54
Debt Equity	0.00	0.44	0.00	0.25	0.00	0.00	0.13	0.29	0.33	0.42
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	17%	-53%	-53%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is -19.54.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -2.93.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.53.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	06-2016	06-2018	07-2020	06-2022	Trend
Revenue	20%	15%	6.9%	-1.4%	-2.5%
Net Income	-	-	-	-	-22%
Stockholders Equity	19%	15%	4.2%	1.9%	-3.4%
FCF	-	-	-	-	-24%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +14.58%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -2.49%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -21.61%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +15.21%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -3.43%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -24.5%.