Mercury Systems, Inc.

MRCY

IndustrialsAerospace & DefenseNASDAQ

$92.50

Market Cap: $5.55B

Mercury Systems, Inc. (MRCY) Valuation Summary

Updated Apr 22, 2026 22:17

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Revenue DCF 5Y	—	N/A	—
Revenue DCF 10Y	$1.67 – $35.56	$3.77	-95.4%
▸ Trading Multiples
EV/Revenue	$22.13 – $56.03	$39.93	-51.7%

Valuation History

DCF Analysis

Mercury Systems, Inc. (MRCY) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$3.77

Market Price

$92.50

Upside / Downside

-95.9%

Verdict

Overvalued

Using a Revenue DCF model with operating margin convergence from -2.1% to a target of 10.2% over 5 years, discounted at a WACC of 8.3%, Mercury Systems, Inc. (MRCY) has an intrinsic value of $3.77 per share (range: $1.67 – $35.56).

Key Assumptions

Current Operating Margin

-2.1%

Target Operating Margin

10.2%

WACC

8.3%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

3.0%

Target CapEx/Rev

14.4%

D&A/Revenue

9.6%

Tax Rate

19.6%

Operating margin fades linearly from the current level to the industry target over the 5-year projection. CapEx intensity fades from the historical average to a maintenance level (D&A × 1.5). Tax is only applied when operating income is positive (NOL shield).

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	953	4.5%	0.3%	3	2	91	(40)	7	47	45
2027	1,044	9.6%	2.8%	29	24	100	(55)	62	7	6
2028	1,142	9.4%	5.3%	60	48	110	(73)	67	18	15
2029	1,259	10.2%	7.8%	98	79	121	(95)	79	25	19
2030	1,374	9.1%	10.2%	141	113	132	(119)	78	47	33
2031	1,377	0.2%	10.2%	141	113	132	(135)	2	108	70
2032	1,388	0.8%	10.2%	142	114	133	(152)	7	88	52
2033	1,406	1.3%	10.2%	144	116	135	(170)	13	68	37
2034	1,433	1.9%	10.2%	147	118	137	(190)	18	47	24
2035	1,468	2.5%	10.2%	150	121	141	(211)	24	27	12

Enterprise Value Bridge

Sum of PV(FCFF)313

Terminal Value (Gordon Growth at 3.0%)518

PV of Terminal Value243

Enterprise Value556

(–) Net Debt335

Equity Value221

(÷) Shares Outstanding59

Fair Value per Share$3.77

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	4.2%	7.2%	10.2%	13.2%	16.2%
6.3%	$-6	$-3	$8	$22	$36
7.3%	$-6	$-3	$5	$16	$26
8.3%	$-6	$-3	$4	$12	$20
9.3%	$-6	$-3	$3	$9	$16
10.3%	$-6	$-3	$2	$8	$13

Current price: $92.50. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 68.1% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$40.03

Market Price

$92.50

Upside / Downside

-56.7%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Mercury Systems, Inc. (MRCY) has a fair value of $40.03 based on 9 comparable companies in the Aerospace & Defense industry.

EV/Revenue Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Mercury Systems, Inc.MRCY	5,434	6.3x	6.0x
Avis Budget Group, Inc.CAR	15,682	4.0x	3.9x
Planet Labs PBCPL	12,735	42.1x	53.0x
Powell Industries, Inc.POWL	8,843	7.6x	7.1x
EnerSysENS	7,459	2.3x	2.3x
Everus Construction Group, Inc.ECG	6,783	1.8x	1.6x
Amentum Holdings, Inc.AMTM	6,774	0.7x	0.7x
Ralliant Corp.RAL	5,103	2.9x	2.9x
The Brink's CompanyBCO	4,579	1.4x	1.3x
Herc Holdings Inc.HRI	3,599	3.4x	4.2x
Industry Median		2.9x	2.9x
(*) Revenue		912	957
= Enterprise Value		2,616	2,758
(-) Net Debt		335	335
Equity Value		2,281	2,423
(/) Outstanding shares		59	59
Fair Price		$39	$41

Selected Fair Value (avg of trailing + forward)

$40.03

-56.7%

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Model

Range

Fair Value

Upside

▸ Discounted Cash Flow

Revenue DCF 5Y

—

N/A

—

Revenue DCF 10Y

$1.67 – $35.56

$3.77

-95.4%

▸ Trading Multiples

EV/Revenue

$22.13 – $56.03

$39.93

-51.7%

DCF Analysis

Mercury Systems, Inc. (MRCY) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$3.77

Market Price

$92.50

Upside / Downside

-95.9%

Verdict

Overvalued

Key Assumptions

Current Operating Margin

-2.1%

Target Operating Margin

10.2%

WACC

8.3%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

3.0%

Target CapEx/Rev

14.4%

D&A/Revenue

9.6%

Tax Rate

19.6%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	953	4.5%	0.3%	3	2	91	(40)	7	47	45
2027	1,044	9.6%	2.8%	29	24	100	(55)	62	7	6
2028	1,142	9.4%	5.3%	60	48	110	(73)	67	18	15
2029	1,259	10.2%	7.8%	98	79	121	(95)	79	25	19
2030	1,374	9.1%	10.2%	141	113	132	(119)	78	47	33
2031	1,377	0.2%	10.2%	141	113	132	(135)	2	108	70
2032	1,388	0.8%	10.2%	142	114	133	(152)	7	88	52
2033	1,406	1.3%	10.2%	144	116	135	(170)	13	68	37
2034	1,433	1.9%	10.2%	147	118	137	(190)	18	47	24
2035	1,468	2.5%	10.2%	150	121	141	(211)	24	27	12

Enterprise Value Bridge

Sum of PV(FCFF)313

Terminal Value (Gordon Growth at 3.0%)518

PV of Terminal Value243

Enterprise Value556

(–) Net Debt335

Equity Value221

(÷) Shares Outstanding59

Fair Value per Share$3.77

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	4.2%	7.2%	10.2%	13.2%	16.2%
6.3%	$-6	$-3	$8	$22	$36
7.3%	$-6	$-3	$5	$16	$26
8.3%	$-6	$-3	$4	$12	$20
9.3%	$-6	$-3	$3	$9	$16
10.3%	$-6	$-3	$2	$8	$13

Current price: $92.50. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 68.1% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$40.03

Market Price

$92.50

Upside / Downside

-56.7%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Mercury Systems, Inc. (MRCY) has a fair value of $40.03 based on 9 comparable companies in the Aerospace & Defense industry.

EV/Revenue Valuation — Aerospace & Defense

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Mercury Systems, Inc.MRCY	5,434	6.3x	6.0x
Avis Budget Group, Inc.CAR	15,682	4.0x	3.9x
Planet Labs PBCPL	12,735	42.1x	53.0x
Powell Industries, Inc.POWL	8,843	7.6x	7.1x
EnerSysENS	7,459	2.3x	2.3x
Everus Construction Group, Inc.ECG	6,783	1.8x	1.6x
Amentum Holdings, Inc.AMTM	6,774	0.7x	0.7x
Ralliant Corp.RAL	5,103	2.9x	2.9x
The Brink's CompanyBCO	4,579	1.4x	1.3x
Herc Holdings Inc.HRI	3,599	3.4x	4.2x
Industry Median		2.9x	2.9x
(*) Revenue		912	957
= Enterprise Value		2,616	2,758
(-) Net Debt		335	335
Equity Value		2,281	2,423
(/) Outstanding shares		59	59
Fair Price		$39	$41

Selected Fair Value (avg of trailing + forward)

$40.03

-56.7%