Mercury SystemsMEX:MRCY 35 Operating Margin % is 2.26% as of Mar. 2026, which is 78% below its 10-year median of 10.26. GuruFocus rates MEX:MRCY with a GF Score™ of 35/100 and a GF Value™ of MXN791.56 (Significantly Overvalued). The stock has 4 warning signs investors should review. Among 347 Aerospace & Defense companies, Mercury Systems ranks worse than 68.88% on this metric.
Mercury Systems (MEX:MRCY) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Mercury Systems Operating Margin % Related Terms
Mercury Systems Operating Margin % Historical Data
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The historical data trend for Mercury Systems's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MEX:MRCY vs HXL, LUNR, LOAR: Operating Margin % Comparison
For the Aerospace & Defense subindustry, Mercury Systems's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Mercury Systems Operating Margin % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Mercury Systems's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Mercury Systems's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Mercury Systems's Operating Margin % for the fiscal year that ended in Jun. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Mercury Systems (MEX:MRCY) has a Operating Margin % of 2.26% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Mercury Systems and its competitors. This is 78% below median its historical median of 10.26. According to the industry distribution chart, Mercury Systems ranks #239 out of 347 companies in the Aerospace & Defense industry, placing it in the top 68.9%.
Is Mercury Systems' Operating Margin % too high?
Mercury Systems' current Operating Margin % of 2.26% is 78% below median its 10-year median of 10.26. The Aerospace & Defense industry median Operating Margin % is 7.75. Mercury Systems' value of 2.26% is 70.8% below this industry median. Based on the distribution chart, Mercury Systems ranks #239 out of 347 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, Mercury Systems has a GF Score™ of 35/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Mercury Systems' Operating Margin % compare to HXL and LUNR?
According to the Aerospace & Defense industry distribution chart, Mercury Systems ranks #239 out of 347 companies for Operating Margin %. This places Mercury Systems in the lower half of its industry. The industry median Operating Margin % is 7.75. Mercury Systems' value of 2.26% is 70.8% below this benchmark. While the company's 10-year median is 10.26 vs. the industry median of 7.75, Mercury Systems has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for an Aerospace & Defense company?
The median Operating Margin % among Aerospace & Defense companies is 7.75, based on 347 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Mercury Systems's current Operating Margin % of 2.26% is 70.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Mercury Systems and its competitors. For the Aerospace & Defense industry, the median Operating Margin % is 7.75 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Mercury Systems's current Operating Margin % is 2.26%, which is 78% below median its own 10-year median of 10.26. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Mercury Systems stock overvalued right now?
Based on GuruFocus' analysis, Mercury Systems (MEX:MRCY) is currently considered Significantly Overvalued. The stock's GF Value™ is MXN791.56, compared to a current price of MXN1,937.83 — trading 144.8% above its estimated fair value. The current Operating Margin % is 2.26%, which is 78% below median its 10-year median of 10.26 and 70.8% below the Aerospace & Defense industry median of 7.75. Mercury Systems' overall GF Score™ is 35/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Mercury Systems (MEX:MRCY), the current Operating Margin % is 2.26% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Mercury Systems (MEX:MRCY) Overvalued in 2026?
Based on GuruFocus' analysis, Mercury Systems stock appears to be overvalued.
The current stock price of MXN1,937.83 is trading 144.8% above its estimated GF Value™ of MXN791.56.
GuruFocus considers Mercury Systems to be Significantly Overvalued.
Key valuation signals for MEX:MRCY:
Operating Margin %: 2.26% (78% below median its 10-year median of 10.26)
GF Value™: MXN791.56 vs. price of MXN1,937.83 (144.8% above fair value)
Industry Position: 70.8% below the Aerospace & Defense median (#239 of 347)
No single metric tells the full story. See the MEX:MRCY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Mercury Systems Inc is a commercial technology company serving the aerospace and defense industry. The company envisions, creates, and delivers secure open architecture solutions powering a broad range of mission-critical applications in challenging and demanding environments. Its Mercury Processing Platform spans the full breadth of signal processing from radio frequency front end to the human-machine interface to convert meaningful data, gathered in remote and hostile environments, into critical decisions. The company manufactures components, products, modules, and subsystems and sells to defense prime contractors, the U.S. government, original equipment manufacturers, and commercial aerospace companies. Geographically, it derives maximum revenue from the United States.
35GF Score
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