ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Mercury Systems's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 1.08%.
As of today (2026-06-25), Mercury Systems's WACC % is 9.23%. Mercury Systems's ROIC % is 0.68% (calculated using TTM income statement data).
Mercury Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Mercury Systems (MEX:MRCY) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Mercury Systems's WACC % is 9.23%. Mercury Systems's ROIC % is 0.68% (calculated using TTM income statement data).
Mercury Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Mercury Systems ROIC % Related Terms
Mercury Systems ROIC % Historical Data
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The historical data trend for Mercury Systems's ROIC % 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.
For the Aerospace & Defense subindustry, Mercury Systems's ROIC %, along with its competitors' market caps and ROIC % 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 ROIC % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Mercury Systems's ROIC % distribution charts can be found below:
* The bar in red indicates where Mercury Systems's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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 ROIC % of 1.08% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Mercury Systems and its competitors.
Is Mercury Systems' ROIC % too high?
Mercury Systems' current ROIC % is 1.08%. The Aerospace & Defense industry median ROIC % is 4.45. Mercury Systems' value of 1.08% is 75.7% below this industry median. 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' ROIC % compare to HXL and LUNR?
Mercury Systems' ROIC % of 1.08% can be compared against companies in the Aerospace & Defense industry. The industry median ROIC % is 4.45. Mercury Systems' value of 1.08% is 75.7% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for an Aerospace & Defense company?
The median ROIC % among Aerospace & Defense companies is 4.45, based on 351 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Mercury Systems's current ROIC % of 1.08% is 75.7% 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 ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Mercury Systems and its competitors. For the Aerospace & Defense industry, the median ROIC % is 4.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Mercury Systems's current ROIC % is 1.08%. 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 ROIC % is 1.08% and 75.7% below the Aerospace & Defense industry median of 4.45. 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 ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Mercury Systems (MEX:MRCY), the current ROIC % is 1.08% 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:
ROIC %: 1.08%
GF Value™: MXN791.56 vs. price of MXN1,937.83 (144.8% above fair value)
Industry Position: 75.7% below the Aerospace & Defense median
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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