What Happened:
Shares of aerospace and defense company Mercury Systems (NASDAQGS:MRCY) jumped 21.9% in the morning session after the company reported second-quarter earnings results. Mercury Systems blew past analysts’ revenue, EPS, and free cash flow expectations. Its backlog, an indicator of future sales, also outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives.
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What is the market telling us:
Mercury Systems’s shares are not very volatile than the market average and over the last year have had only 11 moves greater than 5%. But moves this big are very rare even for Mercury Systems and that is indicating to us that this news had a significant impact on the market’s perception of the business.
Mercury Systems is up 11.1% since the beginning of the year, and at $40.08 per share it is trading close to its 52-week high of $40.38 from August 2023. Investors who bought $1,000 worth of Mercury Systems’s shares 5 years ago would now be looking at an investment worth $481.83.
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