Yahoo Finance Mercury Systems, Inc. (NASDAQ:MRCY) Analysts Are Pretty Bullish On The Stock After Recent Results
It's been a pretty great week for Mercury Systems, Inc. (NASDAQ:MRCY) shareholders, with its shares surging 16% to US$40.12 in the week since its latest annual results. It looks like a positive result overall, with revenues of US$835m beating forecasts by 2.0%. Statutory losses of US$2.38 per share were roughly in line with what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Mercury Systems
Taking into account the latest results, Mercury Systems' seven analysts currently expect revenues in 2025 to be US$843.4m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 55% to US$1.05. Before this latest report, the consensus had been expecting revenues of US$875.8m and US$0.90 per share in losses. So it's pretty clear the analysts have mixed opinions on Mercury Systems after this update; revenues were downgraded and per-share losses expected to increase.
The average price target lifted 17% to US$30.13, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Mercury Systems, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$20.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mercury Systems' past performance and to peers in the same industry. We would highlight that Mercury Systems' revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2025 being well below the historical 5.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Mercury Systems.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Mercury Systems. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Mercury Systems. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Mercury Systems going out to 2027, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Mercury Systems that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
