Analyzing Mercury Systems (NASDAQ:MRCY) & EHang (NASDAQ:EH)

EHang (NASDAQ:EH) and Mercury Systems (NASDAQ:MRCY) are both aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares EHang and Mercury Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EHang	-67.07%	-27.80%	-15.90%
Mercury Systems	-3.23%	1.28%	0.76%

Valuation and Earnings

This table compares EHang and Mercury Systems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EHang	$62.49 million	13.82	-$31.48 million	($0.56)	-21.45
Mercury Systems	$942.55 million	5.31	-$37.90 million	($0.53)	-157.21

EHang has higher earnings, but lower revenue than Mercury Systems. Mercury Systems is trading at a lower price-to-earnings ratio than EHang, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

EHang has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for EHang and Mercury Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EHang	1	1	4	1	2.71
Mercury Systems	2	3	4	1	2.40

EHang presently has a consensus target price of $23.48, suggesting a potential upside of 95.50%. Mercury Systems has a consensus target price of $86.89, suggesting a potential upside of 4.28%. Given EHang’s stronger consensus rating and higher possible upside, equities analysts clearly believe EHang is more favorable than Mercury Systems.

Insider & Institutional Ownership

94.0% of EHang shares are owned by institutional investors. Comparatively, 96.0% of Mercury Systems shares are owned by institutional investors. 39.6% of EHang shares are owned by company insiders. Comparatively, 1.4% of Mercury Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

EHang beats Mercury Systems on 7 of the 13 factors compared between the two stocks.

About EHang

EHang Holdings Limited operates as an autonomous aerial vehicle (AAV) technology platform company in the People's Republic of China, East Asia, West Asia, Europe, and internationally. It designs, develops, manufactures, sells, and operates AAVs, as well as their supporting systems and infrastructure for various industries and applications, including passenger transportation, logistics, smart city management, and aerial media solutions. The company was incorporated in 2014 and is headquartered in Guangzhou, the People's Republic of China.

About Mercury Systems

Mercury Systems, Inc., a technology company, manufactures and sells components, products, modules, and subsystems for aerospace and defense industries in the United States, Europe, and the Asia Pacific. Its products and solutions are deployed in approximately 300 programs with 25 defense contractors and commercial aviation customers. The company offers components, including power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; modules and sub-assemblies, such as embedded processing boards, switched fabrics and boards, digital receivers, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video boards; and integrated subsystems. It also designs and develops digital radio frequency memory units for various modern electronic warfare applications; radar environment simulation and test systems for defense and intelligence applications; and signals intelligence payloads and EO/IR technologies for small UAV platforms, as well as onboard UAV processor systems for real-time wide area motion imagery. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. The company was incorporated in 1981 and is headquartered in Andover, Massachusetts.