Wang & Lee Group board approves 250-to-1 reverse share split
On Wednesday, Raymond (NSE:RYMD) James analyst Brian Gesuale increased the price target for Mercury Systems (NASDAQ:MRCY) shares to $50 from the previous target of $40, while maintaining an Outperform rating on the stock. The decision follows Mercury Systems’ recent financial performance, which Gesuale described as a strong quarter that confirms the company’s recovery from past challenges and demonstrates the sustainability of its operational momentum. The stock, currently trading at $49.29 with a market cap of $2.94 billion, has shown impressive momentum with a 28% gain over the past six months. According to InvestingPro data, analyst price targets for the stock range from $20 to $58, reflecting diverse market opinions.
Mercury Systems impressed analysts with a 22% revenue beat, reporting $223.1 million compared to the anticipated $182.4 million. The company also experienced a 13% growth, surpassing the projected 7.6% decline. The AEBITDA margins were notably higher at 9.9%, compared to the expected 8%, resulting in a 53% beat with $22 million over the forecasted $14.4 million. InvestingPro analysis reveals the company maintains a strong financial position with a current ratio of 4.1, indicating robust liquidity to meet short-term obligations. Get access to 8 more exclusive ProTips and comprehensive financial analysis with InvestingPro.
Gesuale highlighted that $30 million of the revenue outperformance was due to an advance in revenue recognition, which he views as a sustainable result of the company’s strong performance and execution. Additionally, Mercury Systems reported a record backlog of $1.4 billion, marking a 6% growth, and a book-to-bill ratio of 1.09x, or 1.26x excluding the $30 million revenue advancement. These figures are anticipated to continue driving positive results throughout the year.
Looking ahead, Raymond James has set a fiscal year 2025 revenue estimate for Mercury Systems at $877.5 million, which is 4.5% higher than previous estimates and reflects an organic growth of 5.1%, up from the prior 0.6%. The AEBITDA forecast is set at $98.8 million, implying a margin of 11.3%. Gesuale concluded by stating that Mercury Systems is positioned to outperform over a sustained period due to increased visibility in their outlook and margin expansion opportunities, which are among the highest in the defense sector. InvestingPro data indicates that net income is expected to grow this year, though the stock currently appears overvalued based on InvestingPro’s Fair Value analysis. Discover the complete financial health analysis and access the detailed Pro Research Report, available for Mercury Systems and 1,400+ other US stocks.
In other recent news, Mercury Systems, an aerospace and defense technology solutions provider, has made notable strides in its business performance. The company’s Q2 2025 results exceeded expectations, with reported revenue of $223.1 million, surpassing the consensus estimate of $185.35 million, and marking a 13% increase YoY. Despite reporting a GAAP net loss of $17.6 million, Mercury Systems showcased a record in free cash flow (FCF) and operating cash flow of $85.5 million and $81.9 million respectively.
Mercury Systems also reported bookings of $242.4 million for the quarter, resulting in a book-to-bill ratio of 1.09, and its backlog reached a record $1.4 billion, up 6% YoY. These recent developments have led Baird analysts to upgrade Mercury Systems’ stock from Neutral to Outperform and raise the price target from $37.00 to $58.00.
The upgrade reflects Baird’s increased confidence in the company’s turnaround and improved business performance. Analysts from the firm believe that Mercury Systems is on a solid path to realign with its target business model by the end of FY25. The company’s progress towards its FY25 targets and the ongoing improvements in its financial metrics will be key factors to watch in the upcoming months.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.