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Mercury's (MRCY) RF Solutions to Support Naval Application

Zacks Equity Research
·3 min read

Mercury Systems MRCY was recently awarded a $25-million follow-on order from a leading defense prime contractor to support an advanced naval electronic support application with its integrated radio frequency (RF) and digital subsystems. The order is expected to be shipped over the next several quarters.

The continued flow of orders highlights Mercury’s commitment to develop compelling advanced RF conversion and digital signal processing technologies and make them more accessible to the defense industry.

Recently, the company was also awarded a $49-million order by a defense prime contractor to provide its signal processing and RF solutions for a missile defense program. Notably, this was one of the largest orders the company ever received, highlighting its commitment to address complex embedded processing challenges.

Modernization in radar, EW and C4I is high, providing the company with new opportunities in weapon systems, space, avionics processing, and mission computing and embedded rugged services.

Moreover, Mercury’s domain expertise in analog and digital integration has helped it build a solid business relationship with defense prime contractors for a long time.

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

Efforts in Embedded Computing

Its embedded computing servers, including the suite of EnsembleSeries blades, have delivered processing solutions with long lifecycles, higher performance, environmental resiliency, interoperability and SWaP optimization for 35 years.

Notably, the company’s range of space-qualified RF and microwave solutions has been adopted in every successful mission to Mars.

Per Mordor Intelligence, the global embedded computing systems market is expected to witness a CAGR of 6.6% over the period of 2019 to 2025. This is promising for companies like Mercury with a long-standing foothold in the industry.

A Competitive Edge

However, the defense subsystems space is subject to intense competition from the likes of Lockheed Martin LMT, Elbit Systems ESLT and Northrop Grumman Corporation NOC.

Nonetheless, Mercury’s parts are generally cheaper, providing it with a competitive edge in the market.

Mercury currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
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