Mercury Systems awarded multi-year defense contract for subsystem

ANDOVER, Mass. - Mercury Systems, Inc. (NASDAQ:MRCY), currently trading at $78.81 and showing significant momentum with a 120% return over the past year according to InvestingPro data, has secured a multi-year, cost-plus-fixed-fee development contract to create a multi-mission, multi-domain subsystem for a U.S. defense prime contractor, the company announced Wednesday.

The contract, awarded in September, will utilize open standards and capabilities from the Mercury Processing Platform, including advanced microelectronics packaging, mixed signal conversion and distribution, thermal management, and chassis-level integration. The company’s revenue has grown 9.19% over the last twelve months, with InvestingPro analysts expecting profitability this year.

Joe Plunkett, Vice President of Mercury’s Advanced Concepts Group, which will lead the program, said the award "demonstrates the customer’s confidence in our ability to rapidly develop trusted, integrated solutions and subsequently transition to the high-rate manufacturing that is required to support multiple national security platforms."

The Andover-based technology company, with a market capitalization of $4.73 billion and strong liquidity position evidenced by a current ratio of 3.52, specializes in delivering mission-critical processing technologies for aerospace and defense applications. Mercury’s products are currently deployed in more than 300 programs across 35 countries. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers this and over 1,400 other US equities.

The company did not disclose the financial terms of the contract or identify the specific defense contractor in its press release statement.

Mercury Systems provides solutions for various applications including mission computing, sensor processing, command and control, and communications. The company operates from its headquarters in Massachusetts and has over 20 locations worldwide.

In other recent news, Mercury Systems has been awarded a $12.3 million contract to develop an avionics subsystem for a new U.S. military aircraft. This three-year agreement involves creating a Communication Management Unit control head to manage cockpit communications. Additionally, Mercury Systems has signed a production agreement with AeroVironment to support the U.S. Space Force’s Satellite Communication Augmentation Resource program, expanding on their initial contract to cover two more BADGER systems.

In terms of analyst activity, RBC Capital has upgraded Mercury Systems from Sector Perform to Outperform, raising the price target significantly to $90.00, citing the company’s strong position in defense mission-critical processing systems. Meanwhile, Canaccord Genuity has resumed coverage of Mercury Systems with a Buy rating and set a price target of $88.00, highlighting its role as a supplier of defense-grade microelectronics.

Furthermore, Mercury Systems has partnered with Nightwing to enhance the cyber resilience of its hardware through pre-integrated cybersecurity and anti-tamper solutions. These recent developments reflect Mercury Systems’ ongoing expansion and strategic partnerships in the defense sector.

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