Update shared on 30 Nov 2025
Analysts have raised their average price target for Mercury Systems. Recent updates reflect an increase from $71 to a range up to $100 per share. These revisions are attributed to Q3 outperformance, resilient demand in aerospace and defense sectors, and a positive near-term business outlook.
Analyst Commentary
Recent research notes from analysts reveal a range of perspectives on Mercury Systems, reflecting both optimism over near-term growth drivers and caution amid industry challenges. These observations shed light on the key factors influencing the company’s valuation and growth outlook.
Bullish Takeaways- Bullish analysts cite Mercury Systems' strong Q3 performance, with accelerated revenues and higher margins, as a key factor behind recent price target increases.
- Ongoing resilient demand in both aerospace and defense sectors is seen as providing a favorable environment for continued growth.
- Minimal perceived risk to Mercury’s business from potential government shutdowns supports confidence in near-term execution.
- Positive order trends and a book-to-bill ratio above one are viewed as encouraging signals of sustained momentum.
- Some analysts note that while aftermarket demand is strong, uncertainty persists regarding government shutdown impacts on defense spending into Q4 and FY26.
- The complexity of supply chain issues for new aircraft, as well as aerospace sector nuances, could present challenges to execution and valuation.
- Concerns remain about how shifts in government priorities or budget delays may affect future bookings and revenue visibility.
What's in the News
- Mercury Systems, Inc. announced a share repurchase program for up to $200 million of its shares, with no expiration date. (Key Developments)
- The Board of Directors authorized a new buyback plan on November 3, 2025. (Key Developments)
- Mercury Systems received a multi-year development contract in September to develop a multi-mission and multi-domain system for a U.S. defense prime contractor. (Key Developments)
- An agreement with Nightwing was announced to enhance the cyber resiliency of Mercury's hardware, providing pre-integrated cybersecurity and anti-tamper solutions for government customers. (Key Developments)
- The company secured a $12.3 million, three-year contract to develop an avionics subsystem for a U.S. military aircraft, focusing on a new Communication Management Unit. (Key Developments)
Valuation Changes
- Fair Value Estimate remains unchanged at $86 per share, reflecting no adjustment in the model's baseline valuation.
- Discount Rate has risen slightly from 7.81% to 7.81%. This minimal increase suggests a marginally higher risk premium applied to future cash flows.
- Revenue Growth Projection is unchanged at 6.72%. Expectations for top-line expansion remain steady.
- Net Profit Margin expectation is virtually flat at 5.98%, showing stability in anticipated profitability.
- Future P/E Ratio has risen very slightly from 96.95x to 96.95x, with negligible impact on the valuation multiple applied to forecasted earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.