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Mercury (MRCY) Rides on Award Wins & Expanding Clientele

Zacks Equity Research

Mercury Systems MRCY has outperformed the industry year to date on the back of a strong and expanding customer base. Moreover, efforts to strengthen its portfolio and constantly innovate on existing solutions are boosting customer experience and loyalty.

This is evident from its recent win of Airbus’ Best-In-Class Supplier Award in Equipment & Systems. The company outpaced more than 10,000 suppliers to be recognized for its high quality, innovative solutions that help Airbus meet business goals.

Mercury won the Best Performance award in Equipment & Systems for delivering solutions specifically for the C295 — Airbus’ new generation tactical airlifter. This recognition will improve the company’s visibility as a preferred defense systems and equipment supplier among companies operating in the C4ISR market (Communication, Command & Control, Computers, Intelligence, Surveillance & Reconnaissance, and EW).

Mercury Systems Inc Price and Consensus

Mercury Systems Inc Price and Consensus

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

Growing Dominance in C4ISR Market

Making full use of its technological knowhow and relationship with defense contractors, Mercury is forging ahead in the C4ISR (also referred to C4I) market.

The company’s standing in radio frequency, electronic warfare, radar systems and other critical next-generation defense technology investment areas is accelerating market expansion.

Its modular EnterpriseSeries rackmount servers are preferred by a large number of defense contractors for naval weapon systems. In March this year, the company received a $2.8 million order from a major defense prime contractor.

It recently launched the EnsembleSeries HDS6605 — a powerful, general-purpose processing 6U OpenVPX blade server — enhancing its efforts in electronic warfare and rugged defense.

A strong defense procurement environment is a tailwind for the company. Management noted that the C4I market is growing faster than the overall defense space, which is encouraging the company to increase its stronghold in it.

Moreover, per Zion Market Research, the C4ISR market is expected to witness a CAGR of 3.6% during the period between 2018 and 2024 to hit $127.2 billion globally.

Increasing efforts, continued deal wins and expanding product portfolio position Mercury well to take advantage of the opportunities provided by the growing demand in the C4I market.

Zacks Rank & Other Stocks to Consider

Mercury currently has a Zacks Rank #2 (Buy).

Few other top-ranked stocks in the broader Computer and Technology sector are j2 Global, Inc. JCOM, Infineon Technologies IFNNY and Cirrus Logic CRUS, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for j2, Infineon and Cirrus is projected to be 8%, 3.4% and 15%, respectively.

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