Mercury Systems (MRCY) Stock Falls on New Short Report

  • Mercury Systems (MRCY) stock is dropping today on a short report from Glasshouse.
  • The firm calls MRCY stock a “strong sell.”
  • Glasshouse says frequent acquisitions obscure the company’s suspicious sales and earnings.
A photograph of two jet fighters flying above clouds representing MRCY stock.

Source: Shutterstock

Mercury Systems (NASDAQ:MRCY) stock is falling on Tuesday after getting hit with a short report from Glasshouse.

Specifically, Glasshouse is kicking off its coverage of MRCY stock with a “strong sell” rating. The firm also claims investors will see the price of MRCY stock “decline precipitously over the next twelve months.”

Why exactly does Glasshouse have such a negative opinion of Mercury Systems? According to the firm, the company is a “serial acquirer” that uses its frequent acquisitions to cover up suspicious earnings and revenue data.

Glasshouse says the following about the revenue sales growth seen by Mercury Systems:

“Based on our analysis, we believe that much of the recent sales growth was attributable to prematurely recognizing revenue. With respect to the company’s already diminished cash flow figures, we believe stated free cash flow fails to consider the company’s delay of payment to suppliers and the massive amount of cash spent on acquisitions. When including these items, free-cash-flow would have been abysmal for FY2022 and prior.”

Mercury Systems is a technology company that serves the aerospace and defense industries. The company focuses on developing and adapting commercial technology to future-proof aerospace and defense solutions.

Following today’s short report, MRCY stock is down 4%. However, shares are also up 8% year-to-date (YTD).

Investors looking for more recent stock market news are in luck!

InvestorPlace has all of the latest stock news traders need to know about for Tuesday! This includes why shares of General Electric (NYSE:GE), Ayala Pharmaceuticals (NASDAQ:AYLA) and Vinco Ventures (NASDAQ:BBIG) stock are on the move today. You can learn all about this news at the following links!

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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