A History of Outperforming Analyst Forecasts and Beating the Odds: Mercury Systems Inc. (MRCY)

Mercury Systems Inc. (NASDAQ: MRCY) stock jumped 2.72% on Monday to $38.96 against a previous-day closing price of $37.93. With 0.77 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.95 million shares. The 52-week range on MRCY shows that it touched its highest point at $59.13 and its lowest point at $28.90 during that stretch. It currently has a 1-year price target of $42.00. Beta for the stock currently stands at 0.89.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MRCY was up-trending over the past week, with a rise of 9.81%, but this was up by 5.04% over a month. Three-month performance surged to 0.78% while six-month performance fell -15.69%. The stock lost -17.44% in the past year, while it has lost -12.92% so far this year. A look at the trailing 12-month EPS for MRCY yields -0.50 with Next year EPS estimates of 1.81. For the next quarter, that number is 0.18. This implies an EPS growth rate of -348.40% for this year and 36.20% for next year. EPS is expected to grow by 4.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -20.90%.

Float and Shares Shorts:

At present, 57.29 million MRCY shares are outstanding with a float of 56.50 million shares on hand for trading. On Aug 30, 2023, short shares totaled 2.79 million, which was 4.79% higher than short shares on Jul 30, 2023. In addition to MRCY as the firm’s Mercury Systems Inc, MCY serves as its Mercury General Corporation.

Institutional Ownership:

Through their ownership of 103.11% of MRCY’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 54.04% of MRCY, in contrast to 45.90% held by mutual funds. Shares owned by individuals account for 15.67%. As the largest shareholder in MRCY with 11.58% of the stake, William Blair Investment Manageme holds 6,740,439 shares worth 6,740,439. A second-largest stockholder of MRCY, BlackRock Fund Advisors, holds 5,374,015 shares, controlling over 9.24% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in MRCY, holding 5,116,648 shares or 8.79% stake. With a 7.05% stake in MRCY, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 4,103,410 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.96% of MRCY stock, is the second-largest Mutual Fund holder. It holds 1,719,738 shares valued at 67.5 million. Vanguard Explorer Fund holds 2.56% of the stake in MRCY, owning 1,491,214 shares worth 58.53 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, MRCY reported revenue of $289.73M and operating income of $36.53M. The EBITDA in the recently reported quarter was $57.30M and diluted EPS was $0.30.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MRCY since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With MRCY analysts setting a high price target of $48.00 and a low target of $25.00, the average target price over the next 12 months is $38.00. Based on these targets, MRCY could surge 23.2% to reach the target high and fall by -35.83% to reach the target low. Reaching the average price target will result in a decline of -2.46% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded MRCY stock several times over the past three months with 24 Buys and 5 Sells. In these transactions, 635,157 shares were bought while 2,011 shares were sold. The number of buy transactions has increased to 36 while that of sell transactions has risen to 28 over the past year. The total number of shares bought during that period was 703,905 while 31,165 shares were sold.

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