Goldman Sachs maintains its Sell rating on Mercury Systems (MRCY) despite F3Q26 results beating consensus and management raising FY26 guidance. The 12-month price target is revised to $68.00, implying nearly 25% downside from current levels.
Key Takeaways
- 1.F3Q26 results exceeded expectations with revenue of $236mn, adjusted EBITDA of $36mn, and adjusted EPS of $0.27, all beating consensus estimates.
- 2.Mercury Systems raised its full-year 2026 revenue guidance from low-single-digit (LSD) growth to mid-single-digit (MSD) growth.
- 3.Bookings were strong at $348mn, resulting in a book-to-bill ratio of 1.48X for the quarter.
Table of Contents
- Our view on the stock post F3Q26 earnings
- Key elements of the quarter
- Revenue
- Margins
- Balance sheet, cash flow, and capital deployment
- Backlog
- Guidance
- Estimate revisions
- Disclosure Appendix
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Authors
Noah Poponak, CFAConnor DessertWill Ortmayer
Securities
MRCY
Themes
Defense Sector Growth and BacklogValuation and Price/Earnings Divergence
Regions
North AmericaUnited States