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Why is Mercury Systems Stock Up Today After Earnings Beat

Mercury Systems Inc (MRCY) saw a significant surge in its stock price on February 5, 2025, closing at $49.88, up 18.51% from the previous day's close of $42.09. The stock opened at its highest point of the day, $52.19, and experienced a trading volume of 3,382,760, which is nearly seven times its average daily volume. This remarkable price movement was primarily driven by the company's impressive second-quarter earnings report, which exceeded analyst expectations. Mercury Systems reported an adjusted EPS of $0.07, defying the anticipated loss of $0.08 per share, and achieved a revenue of $223.13 million, surpassing the consensus estimate by 23.60%. The company's Sensor & Effector segment, particularly the Radar category, showed substantial growth, contributing to the positive financial results.

Additionally, the stock received a boost from an upgrade by Robert W. Baird, which raised its rating from "neutral" to "outperform" and set a new price target of $58, reflecting a potential upside of 37.80%. The upgrade was based on the firm's improved confidence in Mercury's turnaround story and the elimination of technical risks on challenged programs. The company's record backlog of $1.4 billion and strong operating cash flow further bolstered investor sentiment.