Conviction / Sensing and Space ISR
MRCY
Mercury Systems
conviction · held at 11.0%
Mercury Systems builds the rugged computing boards that process radar and sensor data inside hundreds of military programs. After years of production problems its order book, margins and cash flow have all turned up together, with full year results due in mid August.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $110.42 |
| 30-day move | -4.7% |
| Position in 52-week range | 76 |
| From the 52-week high | -14.0% |
| Average daily volume | $76.9M |
| Weight in the book | 11.0% |
| Since last rebalance | -3.1% |
Why it is in the fund
Thesis
Defense-grade edge compute and ML hardware for sensor processing; enabling real-time autonomous targeting on contested platforms.
Standing judgment
At $110.42 it is 14% off the high in the 76th percentile of its range, so a good deal of the recovery is already in the price ahead of a binary print in under two weeks. The live issue is not the conviction but the weight: an 11.02% position is the fund's maximum single allocation, and a 72 structural role does not support the largest position in the book.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 72 | +2 | The turnaround is now visible in bookings and margins rather than in management language, but a substitutable module supplier into an open-architecture standard cannot be thesis-central, and the 18 August print is unresolved. | Q3 FY2026 record bookings of $348M up 73.7% y/y with a 1.48 book-to-bill, record backlog approximately $1.6B up 17.9% y/y, FY2026 outlook raised to mid-single-digit revenue growth and mid-teens adjusted EBITDA margin, and a Palantir partnership building a digital twin of Mercury's manufacturing oper |
| 2026-08-05 | 70 | flat | first v3 judgment (v2 score was uninformative, see L-001): Backlog, bookings and margin have all inflected together for the first time since the program-execution collapse, and the Palantir Foundry digital twin attacks the specific manufacturing and material-planning failure that caused it. | Q3 FY26 (6 May 2026): record bookings $348.3M, book-to-bill 1.48, backlog approaching $1.6B (+$240M, +17.9% y/y), next-twelve-month backlog +10.3% sequentially. FY26 adjusted EBITDA margin outlook raised to mid-teens, revenue growth approaching mid-single digits, positive free cash flow expected in |
| 2026-08-05 | 70 | flat | first v3 judgment (v2 score was uninformative, see L-001): Backlog, bookings and margin have all inflected together for the first time since the program-execution collapse, and the Palantir Foundry digital twin attacks the specific manufacturing and material-planning failure that caused it. | Q3 FY26 (6 May 2026): record bookings $348.3M, book-to-bill 1.48, backlog approaching $1.6B (+$240M, +17.9% y/y), next-twelve-month backlog +10.3% sequentially. FY26 adjusted EBITDA margin outlook raised to mid-teens, revenue growth approaching mid-single digits, positive free cash flow expected in |
| 2026-08-05 | 70 | +7 | first v3 judgment (v2 score was uninformative, see L-001): Backlog, bookings and margin have all inflected together for the first time since the program-execution collapse, and the Palantir Foundry digital twin attacks the specific manufacturing and material-planning failure that caused it. | Q3 FY26 (6 May 2026): record bookings $348.3M, book-to-bill 1.48, backlog approaching $1.6B (+$240M, +17.9% y/y), next-twelve-month backlog +10.3% sequentially. FY26 adjusted EBITDA margin outlook raised to mid-teens, revenue growth approaching mid-single digits, positive free cash flow expected in |
| 2026-07-29 | 63 | -34 | ⚠️ v2 rank-normalization artifact, unexplained move | v2 `scores` row |
| 2026-07-24 | 97 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 98 | +2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 96 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-08 | 96 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-07 | 96 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-21 | 96 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-20 | 97 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-19 | 96 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-19 | 97 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-12 | 98 | +2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-06-12 | 96 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |