11 Worst Aviation Stocks to Buy According to Analysts

2. Mercury Systems, Inc. (NASDAQ:MRCY)

Average Analyst Price Target Upside as of September 16: -11.95%

Number of Hedge Fund Holders: 19

Mercury Systems, Inc. (NASDAQ:MRCY) is a technology company specializing in the development and provision of advanced components and subsystems for defense and aerospace applications. Serving a wide range of clients, including defense prime contractors, the U.S. government, and commercial aerospace companies, it operates across the U.S., Europe, and the Asia Pacific.

The company’s products are integral to around 300 programs with 25 major defense and aviation customers. Out of 9 analysts’ coverage, Mercury Systems (NASDAQ:MRCY) has 4 Hold ratings and 2 Sell ratings. As of September 16, the average price target of $33.00 has a downside of 11.95% to the stock’s current price.

Mercury Systems (NASDAQ:MRCY) was part of 19 hedge funds’ portfolios in the second quarter with a total stake value of $341.752 million. JANA Partners is the most prominent shareholder in the company and has a position worth $186.9 million, as of June 30.

In the fourth quarter of fiscal 2024, the company reported revenue of $248.6 million, a decline from the $253 million recorded in the same quarter of the previous year. The company’s GAAP net loss for the quarter was $10.8 million, or $0.19 per share, compared to a net loss of $8.2 million, or $0.15 per share, in the fourth quarter of fiscal 2023.

For the full fiscal year 2024, revenues totaled $835.3 million, a decrease from $973.9 million in fiscal 2023. Adjusted EBITDA also dropped significantly to $9.4 million for the year, compared to $132.3 million the previous year.

Consequently, on September 5, JPMorgan analyst Seth Seifman raised the price target on the stock to $36 from $26 but maintained a Neutral rating.

However, Mercury Systems (NASDAQ:MRCY) is taking steps to improve its financial situation. The company secured a $13.2 million contract with the U.S. Navy in July 2024. The agreement involves developing a next-generation RF System-in-Package (SiP) designed to enhance sensor processing technologies. The new system will accelerate the development of radar and electronic warfare capabilities, which could significantly benefit the company’s future prospects.