Market Pulse44Neutral

Mercury Systems, Inc.Opportunity Rank #238(MRCY) Intrinsic Value & DCF Analysis (2026)

Sector: Industrials

Current Price

$111.76

Last updated: Jun 23, 2026

Price vs Intrinsic Value

$111.76
Price
$28.28
Intrinsic Value
Overvalued by 75%MOS: $22.62

Fundamental Score

10/100
Bearish

Weighted across 6 signals

Narrative Score

52/100
Weak

No change vs previous

Trend Score

89/100
Strong

As of 2026-06-22

The intrinsic value of Mercury Systems, Inc. (MRCY) is estimated at $28.28 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $111.76, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 5.88% long-term growth rate and a 10.00% discount rate (calculated: 8.53%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Mercury Systems, Inc. (MRCY) is estimated at $28.28 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $111.76, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 5.88% long-term growth rate and a 10.00% discount rate (calculated: 8.53%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$28.28
-74.70% downside
20% margin of safety: $22.62
Years: 10Growth Rate: 5.88%
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Capital Efficiency

Average Quarterly ROIC
0.18%
Cost of Capital (estimated)8%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

10/100
BearishWeighted across 6 signals
DCF Discount
74.7% premium to price
0
FCF Yield
1.8% trailing FCF yield
0
ROIC vs WACC
ROIC 0.2% vs WACC 8.0% (0.0x)
1
Net Debt / FCF
2.3x net debt to FCF
22
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
-2.9% 5Y FCF CAGR (adjusted)
0
Strengths: Buybacks. Concerns: DCF Discount, FCF Yield.

Narrative Details

52/100
Weak
Vs 6-Month Baseline:Below Avg (25th pct)Weighted across 4 recent drivers
Trend: StableConfidence: 58%Updated: 4h ago
Sources: 13 (10 News · 3 Analyst)
Drivers(last 30 days)
3 regulatory scrutiny+0.1
6 news sentiment+0.0
Earnings beat+0.0
3 analyst reiterations0.0

Trend Details

89/100
StrongAs of 2026-06-22308 daily bars used
6M Relative Strength vs SPY+49.6%
3M Relative Strength vs SPY+29.9%
21 EMA vs 50 EMA+9.2%
Price vs 21 EMA65 · +2.5%
Price vs 50 EMA91 · +11.9%
21 EMA vs 50 EMA95 · +9.2%
3M RS vs SPY99 · +29.9%
6M RS vs SPY100 · +49.6%
Distance from 52W High86 · -7.1%

Investment Coach

Updating... 12d ago
AVOIDConfidence: 89%
Thesis
Mercury Systems, Inc. is significantly overvalued with a current price approximately 73.5% above its estimated fair value, supported by weak fundamentals and a negative spread between ROIC and WACC. Despite a stable and improving narrative, the company's free cash flow yield is thin and returns are trailing its cost of capital.
Key Risk
The primary risk is the continued deterioration or stagnation of fundamental performance, particularly if ROIC does not improve relative to WACC.
Signals To Watch
  • Price moving to at least a mid-teens discount to fair value.
  • Sustained improvement in ROIC versus WACC spread.
  • Meaningful shifts in the narrative trend indicating score direction changes.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 5.88%5 Year CAGR: 68.67%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018201720162015201420132012201120102009200820072006
$120$159$159$95$18$9$158$124$58$92$45$38$21$2$41$43$23$15$18-$2$35

How Intrinziq Estimates Fair Value

Intrinziq estimates Mercury Systems, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Mercury Systems, Inc.Industrials

Mercury Systems, Inc. is a technology firm dedicated to the creation and delivery of a wide range of advanced components, modules, and integrated subsystems, primarily catering to the aerospace and defense industries. The company's operations span globally, with a presence in the United States, Europe, and the Asia Pacific regions. Its sophisticated solutions are vital to approximately 300 programs, supporting 25 defense contractors and numerous commercial aviation customers. The company's extensive product line includes intricate components such as power amplifiers, limiters, switches, oscillators, filters, equalizers, digital and analog converters, various chips, monolithic microwave integrated circuits (MMICs), and advanced memory and storage devices. Furthermore, it offers sophisticated modules and sub-assemblies, including embedded processing boards, switched fabric boards, digital receiver boards, multi-chip modules, integrated radio frequency (RF) and microwave multi-function assemblies, tuners, transceivers, as well as specialized graphics, video, Ethernet, and input/output boards. Mercury Systems also supplies complete integrated subsystems. Beyond these offerings, the company is actively involved in designing and developing critical technologies like digital radio frequency memory units for modern electronic warfare applications, radar environment simulation and test systems for defense and intelligence operations, signals intelligence payloads and electro-optical/infrared (EO/IR) technologies optimized for small unmanned aerial vehicle (UAV) platforms, and advanced onboard UAV processor systems facilitating real-time wide area motion imagery. Established in 1981, the firm, initially named Mercury Computer Systems, Inc., officially rebranded to Mercury Systems, Inc. in November 2012, and its headquarters are located in Andover, Massachusetts.