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ANDOVER, Mass. - Mercury Systems, Inc. (NASDAQ:MRCY), whose stock has surged over 59% year-to-date and maintains a strong market capitalization of $4.01 billion, has secured a new production agreement with AeroVironment, Inc. (NASDAQ:AVAV) to support the U.S. Space Force’s Satellite Communication Augmentation Resource (SCAR) program, according to a company press release.
The agreement, signed in April, will support two additional BADGER systems, expanding on Mercury’s initial 2023 contract that covered hardware production for the first four systems. AeroVironment was awarded the $1.4 billion SCAR contract in 2022 by the Space Rapid Capabilities Office. According to InvestingPro data, Mercury maintains a healthy financial position with liquid assets exceeding short-term obligations by 3.5x.
Mercury provides an FPGA-based signal acquisition and digital beamforming solution for the BADGER system, which is described as a multi-band deployable ground communications system that simplifies space mission operations through reconfigurable beamforming tiles.
"We are proud to extend our partnership with AV for this critical national security mission," said Ken Hermanny, Mercury’s Senior Vice President of Signal Technologies.
Mary Clum, Executive Vice President of AeroVironment’s Space and Directed Energy Mission Systems group, noted that the SCAR program "will soon transform our nation’s satellite command and control capabilities."
The Space Rapid Capabilities Office and AeroVironment have completed all development milestones for the technology and are focusing on delivering the first BADGER unit this year.
Mercury Systems, headquartered in Andover, Massachusetts, delivers mission-critical processing capabilities for aerospace and defense applications, with products deployed in more than 300 programs across 35 countries. While the company has shown impressive revenue growth of 9.19% over the last twelve months, InvestingPro analysis suggests the stock may be overvalued at current levels. Investors seeking detailed insights can access Mercury’s comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 14 additional ProTips about the company’s performance and outlook.
In other recent news, Mercury Systems reported its fourth-quarter 2025 earnings, revealing earnings per share of $0.47, which significantly surpassed the forecast of $0.22. The company also reported revenue of $273 million, exceeding expectations of $243.61 million. This strong financial performance included record bookings and results that surpassed expectations due to a $30 million revenue pull-forward. Following these developments, Truist Securities raised its price target for Mercury Systems to $71 from $60, maintaining a Buy rating. Jefferies also increased its price target to $75 from $50, while keeping a Hold rating, noting the company’s conservative guidance for fiscal year 2026. However, Goldman Sachs reiterated its Sell rating and maintained a $39 price target, despite Mercury Systems’ adjusted EBITDA coming in ahead of consensus expectations and showing sequential margin improvement. These updates reflect a mix of optimism and caution from analysts regarding Mercury Systems’ future performance.
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