Financial Survey: AerSale (NASDAQ:ASLE) & Mercury Systems (NASDAQ:MRCY)

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for AerSale and Mercury Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AerSale	1	4	0	0	1.80
Mercury Systems	2	4	5	2	2.54

AerSale presently has a consensus price target of $6.83, indicating a potential upside of 43.56%. Mercury Systems has a consensus price target of $112.80, indicating a potential upside of 51.88%. Given Mercury Systems’ stronger consensus rating and higher probable upside, analysts clearly believe Mercury Systems is more favorable than AerSale.

Volatility & Risk

AerSale has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AerSale	-1.23%	-0.27%	-0.17%
Mercury Systems	-3.02%	1.29%	0.78%

Earnings & Valuation

This table compares AerSale and Mercury Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AerSale	$335.29 million	0.68	$8.57 million	($0.08)	-59.50
Mercury Systems	$983.62 million	4.60	-$29.67 million	($0.50)	-148.54

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

Insider and Institutional Ownership

69.5% of AerSale shares are owned by institutional investors. Comparatively, 96.0% of Mercury Systems shares are owned by institutional investors. 20.1% of AerSale shares are owned by company insiders. Comparatively, 1.0% of Mercury Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Mercury Systems beats AerSale on 10 of the 15 factors compared between the two stocks.

About AerSale

AerSale Corporation provides aftermarket commercial aircraft, engines, and its parts to passenger and cargo airlines, leasing companies, original equipment manufacturers, and government and defense contractors, as well as maintenance, repair, and overhaul (MRO) service providers worldwide. It operates in two segments, Asset Management Solutions and Technical Operations (TechOps). The Asset Management Solutions segment engages in the sale and lease of aircraft, engines, and airframes, as well as disassembly of these assets for component parts. The TechOps segment provides internal and third-party aviation services, including internally developed engineered solutions, heavy aircraft maintenance and modification, and component MRO, as well as end-of-life disassembly services. This segment provides aircraft modifications, cargo and tanker conversions of aircraft, and aircraft storage; and MRO services for landing gear, thrust reversers, hydraulic systems, and other aircraft components. The company was founded in 2008 and is headquartered in Coral Gables, Florida.

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.