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MRCY +4.68% on Nov 11 · Analysis updated Nov 11, 2026, 10:37 AM ET
Why is Mercury Systems, Inc. (MRCY) stock up?
Mercury reported first-quarter (fiscal 2027) revenue of $253 million on Tuesday evening, up 12.4% and above the roughly $245 million expected, and adjusted earnings of $0.52 a share versus about $0.30 expected. Orders rose 48% to a record $370 million, 1.46 times what it shipped, lifting its backlog 45% to about $2.1 billion, of which over $1 billion is due within 12 months. It raised its full-year outlook to double-digit revenue growth (to nearly $1.1 billion) and adjusted EBITDA (a cash-profit measure) of about $210 million. On Wednesday J.P. Morgan upgraded the stock to Overweight with a $102 target. At about 10:30 AM ET it was $87.49, up 4.7%.
News behind the analysis
- Mercury Systems Reports First Quarter ResultsRecord bookings of $370 million, backlog $2.1 billion, revenue $253 million (+12.4%), adjusted EBITDA $56 million; outlook for fiscal 2027 raised.
- Mercury Systems raises its fiscal 2027 outlook after record first-quarter bookings of $370 millionNew outlook: adjusted EBITDA about $210 million, double-digit revenue growth to nearly $1.1 billion, cash conversion about 40%; Q2 revenue seen up about 10%.
- Mercury Systems falls despite earnings beatAdjusted EPS $0.52 versus $0.30 consensus; revenue above the $245 million estimate; shares fell 2.7% after hours.
- J.P. Morgan Upgrades Mercury Systems (MRCY) to Overweight on Strong Defense BacklogUpgrade cites robust defense spending, improved margins and a backlog above $2 billion supporting double-digit growth.
- Mercury Systems (MRCY) Stock Climbs After Record Backlog and J.P. Morgan UpgradeJ.P. Morgan's $102 target; analyst calls the margin recovery the most striking aspect; free cash outflow widened to $24.4 million.
- Mercury Systems Inc (MRCY) (Q1 2027) Earnings Call HighlightsGross margin up 7.3 points to 35.2%; margins expected to step down in Q2 before improving; legacy low-margin backlog burning down through fiscal 2027.
About Mercury Systems Inc.
Mercury Systems is a defense electronics company based in Andover, Massachusetts. It makes the processing hardware that goes inside military systems: rugged computers, signal-processing boards, radio-frequency and microwave parts, and secure chips. Rather than selling finished weapons, it mostly works as a subcontractor, supplying components and subsystems to the big defense contractors.
How it makes money
It sells electronic modules and subsystems used in radar, electronic warfare, missiles, avionics and space programs. Most of these sales go to large prime contractors working on US and allied defense programs. RTX, Lockheed Martin and Northrop Grumman each brought in at least 10% of revenue in fiscal 2026. That year (ended July 2026) revenue was about $984 million, up roughly 8%, but the company still had a net loss of about $30 million. Backlog (orders not yet delivered) reached a record of roughly $1.9 billion.
What usually moves MRCY
- US and allied defense budgets and how fast money is released
- New bookings and backlog growth on radar, missile and electronic warfare programs
- Progress on profit margins and on returning to steady profitability
- Execution on fixed-price contracts and supply chain problems
- Orders from large prime contractors such as RTX, Lockheed and Northrop
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