Parsons (PSN)
NYSE:PSN
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Parsons
(NYSE:PSN)
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Rating:57Neutral
Price Target:
$59.00
▲(5.34% Upside)
Action:ReiteratedDate:03/18/26
The score is anchored by solid multi-year fundamentals and cash flow quality, plus generally constructive (but mixed) guidance and backlog support. This is meaningfully offset by very bearish technicals (clear downtrend and negative momentum) and a relatively elevated P/E without dividend support, alongside reduced confidence from anomalous latest-year financial statement data.
Positive Factors
Free cash flow conversion
Parsons' consistent high free cash flow conversion (100% in 2025; historically ~87–91% 2020–2024) underpins durable internal funding for debt reduction, M&A, and buybacks. Strong cash generation cushions timing swings in government programs and supports execution of long-term margin targets.
Negative Factors
Confidential fixed-price contract drag
A large confidential fixed-price contract is creating meaningful year-over-year revenue and margin volatility. Fixed-price exposure limits near-term comparables and organic growth, can invert previously accretive revenue, and requires sustained execution improvements to prevent recurring profit erosion.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow conversion
Parsons' consistent high free cash flow conversion (100% in 2025; historically ~87–91% 2020–2024) underpins durable internal funding for debt reduction, M&A, and buybacks. Strong cash generation cushions timing swings in government programs and supports execution of long-term margin targets.
Read all positive factors
Parsons (PSN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.11B
Dividend YieldN/A
Average Volume (3M)1.25M
Price to Earnings (P/E)27.4
Beta (1Y)0.84
Revenue Growth-0.24%
EPS Growth389.03%
CountryUS
Employees20,000
SectorTechnology
Sector Strength88
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.75
Shares Outstanding107,011,500
10 Day Avg. Volume920,072
30 Day Avg. Volume1,246,824
Financial Highlights & Ratios
PEG Ratio12.09
Price to Book (P/B)2.50
Price to Sales (P/S)1.04
P/FCF Ratio16.07
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue1.10
Enterprise Value/Gross Profit4.90
Enterprise Value/Ebitda12.69
Forecast
1Y Price Target
$77.90Price Target Upside39.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)3.28
Revenue Forecast (FY)$6.66B
Parsons Business Overview & Revenue Model
Company Description
Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. It operates through two segments, Federal Solutions and Critic...
How the Company Makes Money
Parsons makes money primarily by performing services and delivering solutions under contracts—most often with U.S. government agencies—and recognizing revenue as work is executed. Key revenue streams include: (1) Federal Solutions: revenue from pr...
Parsons Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call highlighted strong multi-year growth, record adjusted EBITDA margins, full-year 100% free cash flow conversion, robust funded backlog and a large pipeline, alongside strategic M&A and continued share repurchases. However, material challenges remain in the Federal Solutions segment driven by a large confidential fixed‑price contract, execution issues on a remote program, elevated DSO, and a near‑term organic growth headwind reflected in 2026 guidance. Overall the company presented stronger operational and financial momentum in critical infrastructure and a clear strategy to expand margins and capabilities, while acknowledging specific federal execution and timing headwinds.Positive Updates
Full-Year Revenue Growth (Excluding Confidential Contract)
Total revenue for fiscal year 2025 increased 12% year-over-year and was up 8% on an organic basis excluding the confidential contract; three-year total revenue increased 52% (CAGR ~10% organic; 9% CAGR excluding confidential).
Negative Updates
Federal Solutions Revenue and Margin Pressure
Federal Solutions faced significant headwinds: total federal revenue (including confidential contract) decreased ~20% for the full year and decreased 22% in Q4; federal adjusted EBITDA declined 32% for the year and 34% in Q4, with FY federal margin down 170 bps to 8.7%. Management cited lower volume on a fixed-price confidential contract and execution challenges on a remote program.
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Revenue Growth (Excluding Confidential Contract)
Total revenue for fiscal year 2025 increased 12% year-over-year and was up 8% on an organic basis excluding the confidential contract; three-year total revenue increased 52% (CAGR ~10% organic; 9% CAGR excluding confidential).
Read all positive updates
Company Guidance
Parsons guided 2026 revenue of $6.5–$6.8 billion (midpoint +4.5% y/y; +0.5% organic) while noting a ~$345 million y/y headwind from a confidential contract (about $275M of that impacts 2026); excluding that program the portfolio is expected to grow ~10.5% total and ~6% organic. Adjusted EBITDA is guided to $615–$675 million (≈9.7% margin at the midpoint, roughly +6% EBITDA growth and ~10 bps margin expansion vs. 2025 midpoint), operating cash flow $470–$530 million (midpoint ≈+4.5% and targeting 100% free cash flow conversion of adjusted net income), and CapEx rising to ~1.5% of revenue. Management reiterated long‑term targets of mid‑single‑digit+ organic revenue growth, double‑digit adjusted EBITDA margins by 2028, ≥100% free cash conversion and accretive M&A, and highlighted supporting metrics: $8.7B total backlog ($6.4B funded, 73% funded), $11B of awarded but not yet booked contracts, a trailing‑12M book‑to‑bill ~1.0, and Q4 net debt leverage of 1.3x (pro‑forma ~1.8x including Altamira).Parsons Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
66
Positive
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.36B | 6.75B | 5.44B | 4.20B | 3.66B |
| Gross Profit | 1.43B | 1.41B | 1.21B | 946.72M | 852.82M |
| EBITDA | 552.19M | 518.48M | 415.52M | 309.91M | 274.49M |
| Net Income | 241.14M | 235.05M | 161.15M | 96.66M | 64.07M |
Balance Sheet | |||||
| Total Assets | 5.77B | 5.49B | 4.80B | 4.20B | 3.83B |
| Cash, Cash Equivalents and Short-Term Investments | 466.39M | 453.55M | 272.94M | 262.54M | 342.61M |
| Total Debt | 1.48B | 1.42B | 927.15M | 916.41M | 799.14M |
| Total Liabilities | 3.00B | 2.95B | 2.43B | 2.10B | 1.89B |
| Stockholders Equity | 2.64B | 2.42B | 2.29B | 2.04B | 1.90B |
Cash Flow | |||||
| Free Cash Flow | 410.41M | 474.39M | 367.30M | 206.93M | 184.47M |
| Operating Cash Flow | 478.38M | 523.61M | 407.70M | 237.53M | 205.57M |
| Investing Cash Flow | -254.00M | -556.72M | -375.97M | -417.47M | -240.91M |
| Financing Cash Flow | -215.68M | 218.75M | -21.87M | 100.37M | -106.50M |
Parsons Technical Analysis
Negative
56.01
Price Trends
60.74
Negative
65.88
Negative
72.67
Negative
Market Momentum
-1.04
Negative
47.31
Neutral
72.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSN, the sentiment is Negative. The current price of 56.01 is above the 20-day moving average (MA) of 53.82, below the 50-day MA of 60.74, and below the 200-day MA of 72.67, indicating a neutral trend. The MACD of -1.04 indicates Negative momentum. The RSI at 47.31 is Neutral, neither overbought nor oversold. The STOCH value of 72.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSN.
Parsons Risk Analysis
Parsons disclosed 56 risk factors in its most recent earnings report. Parsons reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Risk Related to Our Common Stock Q4, 2025
2.
Changes in global tax laws or their interpretation could have a material impact on our effective income tax rate. Q4, 2025
3.
Risk Relating to Our Business Q4, 2025
Parsons Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $10.09B | 27.54 | 17.82% | 0.70% | 4.18% | 16.05% | |
76 Outperform | $10.77B | 30.59 | 13.29% | ― | 12.60% | 24.02% | |
70 Outperform | $10.27B | 31.85 | 25.19% | 1.28% | 2.37% | -6.93% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $13.85B | 36.68 | 4.18% | 0.97% | -4.99% | 22.16% | |
57 Neutral | $6.11B | 27.35 | 9.48% | ― | -0.24% | 389.03% | |
53 Neutral | $6.75B | -28.04 | -8.50% | ― | 0.27% | -159.24% |
* Technology Sector Average
PSN
Parsons
56.01
-8.91
-13.72%
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Parsons Corporate Events
Business Operations and StrategyExecutive/Board Changes
Parsons Announces CHRO Transition and Leadership Succession Plan
Positive
Mar 17, 2026
Parsons Corporation announced on March 17, 2026 that Chief Human Resources Officer Susan Balaguer will retire effective April 1, 2026, and will stay on in an advisory capacity through the end of May to support the transition. The board approved a ...
Executive/Board Changes
Parsons Grants CEO Long-Term Performance-Based Equity Award
Positive
Feb 26, 2026
On February 20, 2026, Parsons Corporation’s board approved a $10 million stock award for Chief Executive Officer Carey A. Smith, structured as 60% performance stock units and 40% restricted stock units, to recognize her performance and suppo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.