MRCY - Pipeline Remains Robust; Revenue Linearity and Visibility Progress

研报英文原文证据摘录

MRCY - Pipeline Remains Robust; Revenue Linearity and Visibility Progress

Truist Securities

Equity Research Report May 11, 2026

INDUSTRIALS: Defense Mercury Systems, Inc. (MRCY)

MRCY - Pipeline Remains Robust; Revenue Linearity and Visibility Alexandra Mandery

212-319-3461 Progress

Alexandra.Mandery@truist.com

We reiterate our Buy rating/PT of $109 post-F3Q26. MRCY beat consensus across the

board and made upward revisions to directional guidance for the balance of the year. The

Stock Rating BUY company achieved record bookings of $348.3M, resulting in a B2B ratio of 1.48x and a

Unchanged total backlog approaching $1.6B. Domestic demand makes up 88% of the business, and

Price Target has grown 17% YOY and 4% seq'l, which we see as a positive given the defense demand $109.00 backdrop. Revenue was pulled forward to F3Q, as expected, which reflects the efforts to

Unchanged improve revenue linearity and forecast visibility.

F3Q26 Key Takeaways:

TR to Target 20.7%

Price (May 8, 2026) $90.34 Supply Chain Alignment and Revenue Linearity. A strategic shift in supply chain

52-Wk Range $103.02-$44.88 management has improved Mercury’s ability to convert backlog into revenue with greater

predictability. By pulling the supply chain to the left and staging materials earlier than in Market Cap ($M) $5,330

previous years, the company accelerated $25 million in revenue, $15 million in adjusted ADTV 400,188

EBITDA, and $25M in cash, originally planned for the fourth quarter into the third. This

Shares Out (M) 59 proactive procurement strategy has smoothed out historical linearity issues, providing

Short Interest Ratio/% Of Float 7.9% management with enough visibility to raise their full-year FY26 revenue growth expectations

Enterprise Value ($M) $5,560 to mid-single-digits.