The Mercury Systems, Inc. (NASDAQ:MRCY) First-Quarter Results Are Out And Analysts Have Published New Forecasts

Last week saw the newest quarterly earnings release from Mercury Systems, Inc. (NASDAQ:MRCY), an important milestone in the company's journey to build a stronger business. Revenue of US$225m came in 8.6% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.21, a 18% miss. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from Mercury Systems' eight analysts is for revenues of US$952.5m in 2026. This would reflect an okay 2.1% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 72% to US$0.16. Before this latest report, the consensus had been expecting revenues of US$949.3m and US$0.18 per share in losses. Although the revenue estimates have not really changed Mercury Systems'future looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.

View our latest analysis for Mercury Systems

The average price target held steady at US$82.25, seeming to indicate that business is performing in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Mercury Systems analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$43.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Mercury Systems' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.8% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 0.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.5% annually for the foreseeable future. Although Mercury Systems' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Mercury Systems' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$82.25, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Mercury Systems going out to 2028, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Mercury Systems you should be aware of.

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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.