Mercury Computer Systems Inc. Stock Upgraded (MRCY)

NEW YORK ( TheStreet) -- Mercury Computer Systems (Nasdaq: MRCY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 22.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MRCY's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.09, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MERCURY COMPUTER SYSTEMS INC is rather high; currently it is at 63.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.30% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $11.03 million or 36.09% when compared to the same quarter last year. In addition, MERCURY COMPUTER SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -40.36%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 74.5% when compared to the same quarter one year prior, rising from $5.18 million to $9.05 million.

Mercury Computer Systems, Inc. designs, manufactures, and markets high-performance embedded, real-time digital signal and image processing systems and software for specialized defense and commercial computing markets. The company has a P/E ratio of 20.5, below the average computer hardware industry P/E ratio of 23.4 and above the S&P 500 P/E ratio of 17.7. Mercury Computer Systems has a market cap of $458.5 million and is part of the technology sector and computer hardware industry. Shares are up 12.5% year to date as of the close of trading on Tuesday.

You can view the full Mercury Computer Systems Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff