Parsons (PSN) AI Stock Analysis

• Market Cap: $7.52B
• Dividend Yield: N/A
• Average Volume (3M): 1.49M
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.65
• Revenue Growth: 16.61%
• EPS Growth: 1279.09%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 79
• Industry: Industrial - Machinery
• EPS (TTM): 0.78
• Shares Outstanding: 106,874,985
• 10 Day Avg. Volume: 1,771,973
• 30 Day Avg. Volume: 1,485,178
• PEG Ratio: 7.20
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.19
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 0.21
• Enterprise Value/Gross Profit: 3.80
• Enterprise Value/Ebitda: 2.93
• 1Y Price Target: $78.71
• Price Target Upside: 12.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 77 Outperform
• Price Target: $77.00 ▲(10.41%Upside)

Parsons scores well due to its strong financial performance, highlighted by robust revenue growth and efficient cash management. The technical analysis indicates a moderate bullish sentiment, while valuation remains reasonable. Recent earnings and corporate events suggest a positive outlook, albeit with some challenges.

Positive Factors

Market Opportunities

Broader portfolio growth is supported by significant opportunities, with a robust pipeline of $12BB in unbooked backlog and $55BB in the pipeline.

Strategic Alignment

Parsons' alignment to U.S. and global spending priorities across global infrastructure mega projects, environmental services, and defense tech services is highlighted.

Negative Factors

Contract Uncertainty

The recent Department of State reorganization is expected to create additional uncertainty surrounding a classified contract for PSN.

Financial Performance

FY25 Adjusted EBITDA is now expected to be lower than previously forecasted, indicating reduced financial expectations.

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 Critical Infrastructure. The company offers cyber security and intelligence services, as well as offensive and defensive cybersecurity platforms, tools, and operations to the U.S. Department of Defense and the United States intelligence community; space and geospatial solutions, such as geospatial intelligence, threat analytics, space situational awareness, small satellite launch and integration, satellite ground systems, fight dynamics, and command, and control solutions to the National Geospatial-Intelligence Agency, National Reconnaissance Office, and multiple units within the U.S. Department of Defense. It also provides missile defense and C5ISR solutions, such as integrated air and missile defense, data fusion and analytics, platform system integration, directed energy, joint all-domain operations, and command and control systems to Defense Intelligence Agency and the U.S. Department of Defense; technology services for energy production systems, aviation, healthcare and bio-surveillance systems, and environmental systems and associated infrastructure, as well as nuclear waste processing and treatment, weapons of mass destruction elimination, program and project management, infectious disease control analytics, and data protection solutions. In addition, the company offers intelligent transportation system management, aviation, rail and transit systems, smart cities software, and critical infrastructure cyber protection to the transportation authorities, rail, and transit entities; engineering services for infrastructure; and program management, and environmental solutions to private-sector industrial clients and public utilities. Parsons Corporation was founded in 1944 and is headquartered in Centreville, Virginia.

How the Company Makes Money

Parsons Corporation generates revenue through a combination of government contracts and commercial projects. A significant portion of its income comes from long-term contracts with U.S. federal, state, and local government agencies, particularly in defense, intelligence, and infrastructure sectors. These contracts often span multiple years, providing a steady revenue stream. Additionally, Parsons engages in partnerships and collaborations with other corporations and technology firms to enhance its service offerings and expand its market reach. The company also invests in developing proprietary technologies and software solutions, further contributing to its revenue through licensing and implementation services across various industries.

Parsons Financial Statement Overview

Summary

Parsons displays robust financial health with strong revenue and profit growth, effective cost management, and solid cash flow generation. The balance sheet is stable, although there is room for improving asset utilization. Overall, the company's financial metrics indicate a well-positioned status in its industry.

Income Statement

Parsons has demonstrated a strong income statement with robust revenue growth, particularly noticeable in the transition from 2023 to TTM 2025. The gross profit margin has notably increased, suggesting improved efficiency. Both EBIT and net profit margins show solid performance, indicative of effective cost management and operational efficiency. The TTM data reflects a net profit margin of 6.03%, highlighting profitability strength.

Balance Sheet

The company's balance sheet is stable with a moderate debt-to-equity ratio of 0.56 in TTM, indicating balanced leverage. The equity ratio stands at 45.05%, suggesting a strong equity base relative to total assets. Return on equity improved to 16.65% in TTM, reflecting efficient use of equity to generate profits, although there is room for improvement in asset management.

Cash Flow

Parsons shows strong cash flow generation, with a healthy operating cash flow to net income ratio of 1.41 in TTM, indicating solid cash conversion. Free cash flow has grown steadily, with a notable increase from 2024 to TTM, enhancing financial flexibility. The company maintains a strong free cash flow to net income ratio of 1.28, showcasing efficient cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.77B	6.75B	5.44B	4.20B	3.66B	3.92B
	Gross Profit
1.44B	1.41B	1.21B	946.72M	852.82M	876.86M
	EBIT
435.45M	428.07M	288.36M	185.67M	132.45M	177.81M
	EBITDA
745.71M	518.48M	415.52M	309.91M	274.49M	310.35M
	Net Income Common Stockholders
408.61M	235.05M	161.15M	96.66M	88.95M	98.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
269.75M	453.55M	272.94M	262.54M	342.61M	483.61M
	Total Assets
5.45B	5.49B	4.80B	4.20B	3.83B	3.94B
	Total Debt
1.38B	1.42B	927.15M	914.17M	796.72M	826.60M
	Net Debt
1.11B	967.50M	654.21M	651.63M	454.11M	342.99M
	Total Liabilities
2.90B	2.95B	2.43B	2.10B	1.89B	2.08B
	Stockholders Equity
2.45B	2.42B	2.29B	2.04B	1.90B	1.81B
Cash Flow		Free Cash Flow
521.99M	474.39M	367.30M	206.93M	184.47M	255.13M
	Operating Cash Flow
575.24M	523.61M	407.70M	237.53M	205.57M	289.16M
	Investing Cash Flow
-572.88M	-556.72M	-375.97M	-417.47M	-240.91M	-346.37M
	Financing Cash Flow
-151.62M	218.75M	-21.87M	100.37M	-106.50M	348.23M

Parsons Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 69.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSN, the sentiment is Neutral. The current price of 69.74 is above the 20-day moving average (MA) of 67.87, above the 50-day MA of 65.66, and below the 200-day MA of 83.09, indicating a neutral trend. The MACD of 1.20 indicates Negative momentum. The RSI at 58.83 is Neutral, neither overbought nor oversold. The STOCH value of 91.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PSN.

Parsons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPXC	78 Outperform	$7.50B	36.70	15.24%	―	10.78%	30.05%
PSN	77 Outperform	$7.52B	18.87	17.75%	―	16.61%	1279.09%
MIDD	73 Outperform	$7.85B	17.97	12.33%	―	-2.56%	11.51%
FLS	72 Outperform	$6.19B	22.18	14.00%	1.77%	4.23%	20.40%
RRX	72 Outperform	$9.40B	39.23	3.69%	0.99%	-10.19%	―
GNRC	67 Neutral	$7.59B	21.72	14.29%	―	8.07%	58.67%
Sector *	62 Neutral	$11.97B	10.08	-7.46%	2.96%	7.37%	-8.22%

Parsons Corporate Events

Parsons Secures New $1.2 Billion Financing Package

Parsons has refinanced its existing term loan and revolving credit facility, originally maturing in October 2025 and June 2026, respectively. On June 5, 2025, the company secured a $450 million unsecured term loan and a $750 million unsecured revolving credit facility. These financial moves are aimed at enhancing the company’s liquidity for general working capital, capital expenditures, and other corporate purposes. The refinancing replaces previous agreements and provides Parsons with flexible borrowing options, potentially impacting its financial stability and operational capacity positively.

The most recent analyst rating on (PSN) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Parsons stock, see the PSN Stock Forecast page.

Parsons Adjusts 2025 Financial Guidance Amid Contract Changes

Parsons has announced adjustments to its 2025 financial guidance due to uncertainties stemming from a Department of State reorganization impacting a confidential contract. The company has removed the anticipated financial effects of this contract from its guidance for any period after June 2025, resulting in a reduction of its total revenue forecast and cash flow from operating activities, while maintaining a stable adjusted EBITDA margin.

The most recent analyst rating on (PSN) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Parsons stock, see the PSN Stock Forecast page.