Mercury Systems (NASDAQ:MRCY) Shares Up 5.4% - Time to Buy?

Key Points

• Mercury Systems shares rose 5.4% to $83.89, though trading volume was 69% below its daily average.
• Analyst views are mixed: the consensus rating is Hold, with an average price target of $107.90.
• Quarterly EPS of $0.37 slightly missed estimates, while revenue of $289.78 million beat forecasts and grew 6.1% year over year.

Mercury Systems Inc (NASDAQ:MRCY - Get Free Report)'s share price shot up 5.4% on Tuesday. The stock traded as high as $86.00 and last traded at $83.8940. Approximately 209,037 shares were traded during mid-day trading, a decline of 69% from the average daily volume of 671,745 shares. The stock had previously closed at $79.62.

Analyst Ratings Changes

A number of equities research analysts recently commented on MRCY shares. Zacks Research lowered shares of Mercury Systems from a "strong-buy" rating to a "hold" rating in a report on Tuesday, August 4th. Deutsche Bank Aktiengesellschaft cut Mercury Systems to a "hold" rating in a report on Wednesday, August 12th. JPMorgan Chase & Co. boosted their price target on Mercury Systems from $99.00 to $101.00 and gave the company a "neutral" rating in a report on Monday, July 13th. Robert W. Baird upped their price objective on Mercury Systems from $120.00 to $130.00 and gave the stock an "outperform" rating in a research report on Wednesday, August 19th. Finally, Canaccord Genuity Group increased their price objective on Mercury Systems from $106.00 to $128.00 and gave the stock a "buy" rating in a report on Thursday, August 20th. One equities research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating, four have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the company currently has an average rating of "Hold" and an average target price of $107.90.

Mercury Systems Stock Up 6.3%

The company has a debt-to-equity ratio of 0.29, a current ratio of 2.96 and a quick ratio of 1.85. The firm has a 50-day moving average of $80.18 and a 200 day moving average of $91.07. The stock has a market capitalization of $5.15 billion, a price-to-earnings ratio of -169.67 and a beta of 0.98.

Mercury Systems (NASDAQ:MRCY - Get Free Report) last posted its quarterly earnings results on Tuesday, August 18th. The technology company reported $0.37 earnings per share for the quarter, missing the consensus estimate of $0.38 by ($0.01). The company had revenue of $289.78 million for the quarter, compared to analyst estimates of $266.09 million. Mercury Systems had a positive return on equity of 1.29% and a negative net margin of 3.02%. The firm's revenue for the quarter was up 6.1% compared to the same quarter last year. During the same period last year, the firm earned $0.47 EPS. As a group, sell-side analysts forecast that Mercury Systems Inc will post 0.91 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, EVP David Farnsworth sold 8,155 shares of the firm's stock in a transaction that occurred on Wednesday, August 19th. The stock was sold at an average price of $100.31, for a total value of $818,028.05. Following the completion of the sale, the executive vice president directly owned 124,579 shares of the company's stock, valued at $12,496,519.49. This trade represents a 6.14% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO William Ballhaus sold 111,076 shares of Mercury Systems stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $87.12, for a total value of $9,676,941.12. Following the transaction, the chief executive officer owned 342,436 shares of the company's stock, valued at $29,833,024.32. This represents a 24.49% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 452,186 shares of company stock worth $41,933,170. Company insiders own 0.99% of the company's stock.

Hedge Funds Weigh In On Mercury Systems

Several large investors have recently modified their holdings of MRCY. BlackRock Inc. acquired a new position in shares of Mercury Systems in the 2nd quarter valued at approximately $1,146,342,000. Bamco Inc. NY bought a new position in Mercury Systems in the second quarter valued at approximately $74,244,000. American Capital Management Inc. bought a new position in Mercury Systems in the second quarter valued at approximately $59,460,000. William Blair Investment Management LLC acquired a new position in Mercury Systems during the second quarter valued at approximately $46,453,000. Finally, Bank of New York Mellon Corp acquired a new position in Mercury Systems during the second quarter valued at approximately $38,438,000. 95.99% of the stock is owned by institutional investors.

About Mercury Systems

Mercury Systems, Inc. develops and supplies secure processing systems and subsystems for the aerospace and defense industries. Its products include embedded computing, signal processing, radio-frequency and microwave components, and other technologies used to process and manage critical data. The company's technologies support applications such as radar, electronic warfare, communications, avionics, and command-and-control systems. Mercury works with defense contractors and government customers, providing components and systems designed for use in demanding environments.

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