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Mercury (MRCY) Avails RES X08 for Aerospace & Defense Missions

Mercury Systems MRCY recently revealed its next-generation rugged edge servers (RES) with an aim to enhance compute-intensive edge workloads and drive quick insights for the aerospace and defense applications.

Mercury’s latest-gen RES X08 leverages commercial off-the-shelf technologies like Intel Corporation’s INTC fourth-generation Xeon Scalable processors (formerly Sapphire Rapids), NVIDIA’s double-wide H100 graphic processing units (GPUs), high-speed DDR5 memory, 400 Gbps network cards and Compute Express Link and latest data storage technologies in lightweight, compact form factors like low-latency peripheral component interconnect express 5.0 fabrics.

The new RES X08 is purpose-built to keep pace with ever-increasing data sources and streams and tackles challenging workloads in the most remote environments where mission is critical and the cost of failure is high. It delivers significant performance improvements over prior-generation technologies, RES X07 and RES X06 servers, like 50% increased central processing unit core count, 6 times greater GPU performance and 50% increased memory bandwidth. Mercury is currently accepting orders for pre-production samples of RES X08 servers.

Mercury's domain expertise in analog and digital integration helped it build a solid business relationship with defense prime contractors. Last week, the company unveiled DRF3182 Direct radio frequency Processing Module, industry’s first signal processing board purpose-built for the aerospace and defense applications. It features Intel’s Stratix 10 AX system-on-chip field programmable gate array, the processing board intends to make sure that the modern electronic warfare and radar systems are able to significantly increase their processing densities. This will enable them to offer decision advantage to the United States and allied forces with an aim to transform world into a more secure place.

In November 2022, the company launched a radiation-tolerant version of its 8GB DDR4 memory component that sets a new bar for performance in data-intensive processing applications in space.

Mercury Systems Inc Price and Consensus

Mercury Systems Inc Price and Consensus
Mercury Systems Inc Price and Consensus

Mercury Systems Inc price-consensus-chart | Mercury Systems Inc Quote

In October, Mercury announced that its rapidly reprogrammable electronic attack training system, mPOD, successfully underwent final flight testing and is now available for order. The mPOD is a jammer training pod designed to train, test and evaluate military pilots for combat in electromagnetic environments. It simulates realistic adversary jamming threats to better prepare the U.S. pilots by forming unique strategies to gain an advantage over adversaries. This solution offers integrated threat presentations, which drastically reduce training costs for the U.S. Air Force and Navy.

Before that, in the same month, the company revealed that the mission computer built by Mercury Mission Systems International for the Airbus A330 Multi Role Tanker Transport aircraft received the world’s first certification for automatic air-to-air refueling boom operations.

Based on the COTS ROCK platforms from Mercury that draw from a range of safety-certifiable modular COTS building blocks, the purpose-built computer addresses the need for high-end video processing and the safety-criticality of the application. The system handles video streams with very low latency across multiple processors and meets stringent DO-178/ DO-254 software reliability processes.

The company’s sustained focus on introducing new and advanced products is helping it win new contracts. Mercury's total bookings at the fiscal 2023 first quarter-end were $266.9 million, reflecting a book-to-bill ratio of 1.17. The company ended the quarter with a backlog of $1.08 billion, up $193.1 million from a year ago. From this backlog, products worth $694.6 million are expected to be shipped within the next 12 months.

Zacks Rank & Key Picks

Currently, Mercury and Intel both carry Zacks Rank #3 (Hold). Shares of MRCY and INTC have fallen 11.2% and 42.4%, respectively, in the past year.

Some top-ranked stocks from the broader Computer and Technology sector are Axcelis Technologies ACLS and Bandwidth BAND. While Axcelis sports a Zacks Rank #1 (Strong Buy), Bandwidth carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Axcelis’ fourth-quarter 2022 earnings has been revised 41 cents northward to $1.46 per share over the past seven days. For 2022, earnings estimates have improved by 8.5% to $5.21 per share over the past seven days.

ACLS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.2%. Shares of the company have risen 76.4% in the past year.

The Zacks Consensus Estimate for Bandwidth’s fourth-quarter 2022 earnings has been revised by a penny to 4 cents per share over the past 90 days. For 2022, earnings estimates have moved north by 25 cents to 37 cents per share in the past 90 days.

BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 61.6% in the past year.

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