AAR Corp. (AIR) vs Mercury Systems Inc (MRCY)

AAR Corp. and Mercury Systems Inc are both Aerospace & Defense companies. AAR Corp. and Mercury Systems Inc are of similar size ($5.1B and $4.9B). Mercury Systems Inc has negative trailing earnings, so its P/E is not meaningful; AAR Corp. trades at 23.8×. AAR Corp. grew revenue faster over the last twelve months: 19.0% against 7.85%. AAR Corp. has the higher net margin (5.67% vs −3.02%) and the higher return on invested capital (6.97% vs 0.01%). Across the 21 metrics below, AAR Corp. leads on 17 and Mercury Systems Inc on 4.

Valuation

Metric AIR MRCY Aerospace & Defense median
P/E 23.84 n/m 33.00
P/S 1.34 4.97 3.63
P/B 2.61 3.26 3.24
Price to free cash flow 51.00 71.77 34.01
EV/EBITDA 14.85 70.22 18.69
EV/Sales 1.59 5.21 3.94
Earnings yield 4.19% (0.60%) 1.31%
Free cash flow yield 1.96% 1.39% 0.00%

Profitability

Metric AIR MRCY Aerospace & Defense median
Gross margin 18.80% 28.58% 25.48%
Operating margin 8.40% 0.03% 4.54%
Net margin 5.67% (3.02%) 2.22%
Free cash flow margin 2.64% 6.92% 0.00%
Return on equity 12.88% (2.00%) 6.43%
Return on assets 6.05% (1.25%) 2.70%
Return on invested capital 6.97% 0.01% 1.56%

Growth

Metric AIR MRCY Aerospace & Defense median
Revenue growth (TTM) 18.97% 7.85% 18.43%
EPS growth (last fiscal year) 1,288.57% 23.08% —
Revenue growth, 5-year CAGR 14.89% 1.26% 9.62%
Net income growth, 5-year CAGR 39.60% 0.00% 0.00%

Health

Metric AIR MRCY Aerospace & Defense median
Debt to equity 0.52 0.29 0.24
Current ratio 2.84 2.96 2.72
Net debt to EBITDA 2.23 3.11 1.12

Dividend

Metric AIR MRCY Aerospace & Defense median
Dividend yield — — 1.04%
Payout ratio 0.00 0.00 0.00

Size

Metric AIR MRCY Aerospace & Defense median
Market cap 4.85b 5.06b 2.52b

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