Parsons (PSN) AI Stock Analysis

• Market Cap: $5.30B
• Dividend Yield: N/A
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 29.7
• Beta (1Y): 0.86
• Revenue Growth: -0.24%
• EPS Growth: 389.03%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 88
• Industry: Industrial - Machinery
• EPS (TTM): 0.75
• Shares Outstanding: 105,831,020
• 10 Day Avg. Volume: 1,502,060
• 30 Day Avg. Volume: 1,392,298
• PEG Ratio: 12.09
• Price to Book (P/B): 2.50
• Price to Sales (P/S): 1.04
• P/FCF Ratio: 16.07
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 1.00
• Enterprise Value/Gross Profit: 4.45
• Enterprise Value/Ebitda: 11.53
• 1Y Price Target: $81.50
• Price Target Upside: 62.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 3.31
• Revenue Forecast (FY): $6.69B

• Rating: 57 Neutral
• Price Target: $56.00 ▲(11.91% Upside)
• Action: Reiterated Date: 03/18/26
• Date: Action: Reiterated 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

Strong cash generation

Consistent operating and free cash flow conversion through 2020–2024 provides durable funding for operations, M&A, and buybacks. Reliable cash generation reduces refinancing risk, supports targets for ≥100% FCF conversion, and cushions timing volatility in government contract receipts over multiple years.

Large funded backlog & pipeline

A sizable funded backlog and large pipeline provide multi-period revenue visibility and conversion runway. High funded backlog (73%) lowers near-term revenue volatility, underpins management's growth guidance, and supports sustainable revenue growth despite isolated program timing or booking delays.

Critical Infrastructure segment strength

Repeated CI outperformance and long streak of book-to-bill ≥1 show structural demand and pricing power in infrastructure services. Margin expansion and sustained bookings indicate durable competitiveness, improving enterprise profitability mix and partially offsetting federal segment cyclicality over the medium term.

Negative Factors

Federal Solutions execution pressure

Material declines and execution problems in Federal Solutions highlight concentration and delivery risks in Parsons' core government business. Persistent federal performance weakness can suppress margins, hinder organic growth, and force resource reallocation, constraining sustainable company-wide profitability.

Large confidential fixed-price contract headwind

Significant exposure to one confidential fixed‑price award creates structural comparability and margin pressure. Fixed‑price terms amplify downside from volume declines or execution issues, increasing revenue volatility and limiting predictable organic growth until the contract's impact lags out of comparisons.

Higher pro forma leverage after M&A

Pro forma leverage rising toward ~1.8x reduces balance-sheet flexibility and increases sensitivity to cash-flow swings from contract timing or federal execution issues. While still moderate, higher leverage constrains optionality for large accretive deals and raises monitoring needs around covenant and deleveraging execution.

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 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 providing mission and enterprise solutions such as systems engineering/integration, cyber operations and cybersecurity services, intelligence support, missile defense and other defense-related technical services, and software-enabled capabilities. These are typically sold through competitively awarded prime contracts or subcontracts, including task orders under indefinite-delivery/indefinite-quantity (IDIQ) vehicles, and are paid based on allowable costs plus fees, fixed-price milestones, or time-and-materials/labor-hour arrangements depending on the contract. (2) Critical Infrastructure: revenue from professional services and program delivery supporting infrastructure and environmental work, including planning, design support, program management, construction management/oversight, and related technical advisory services for public-sector infrastructure owners; compensation similarly depends on contract structure (e.g., professional services billed by labor/time, cost-plus arrangements for program management, or fixed-price elements tied to deliverables). Across both segments, earnings are influenced by contract mix (e.g., cost-reimbursable vs. fixed-price), ability to win and retain positions on large multi-award contract vehicles, and backlog conversion (turning awarded contract value into revenue as tasks are funded and performed). Partnerships and teaming are common in government procurement—Parsons may serve as a prime contractor or as a subcontractor within contractor teams to pursue and execute large programs—though specific partner relationships are not uniformly disclosed.

Parsons Financial Statement Overview

Summary

Underlying 2020–2024 fundamentals are stable-to-improving with dependable free cash flow conversion (a key strength) and manageable leverage, but confidence is tempered by the highly abnormal 2025 annual income statement snapshot and only moderate operating cash flow coverage of total debt.

Income Statement

Revenue and earnings expanded strongly from 2022–2024 (revenue up meaningfully with steady improvement in net profit margin from ~2.3% to ~3.5%). Profitability looks consistent rather than exceptional: gross margin held around the low-20% range and operating profitability stayed in the mid-single digits. The main concern is the 2025 annual data showing an extreme revenue collapse and distorted margin fields (e.g., gross profit margin at 0%), which raises data-quality/one-off reporting risk and reduces confidence in the latest trend.

Balance Sheet

Leverage appears manageable for the profile: debt-to-equity generally sits around ~0.4–0.6, and equity has grown over time alongside assets. Returns on equity were solid in 2022–2024 (improving to roughly 9.7% in 2024), suggesting the balance sheet is being used productively. However, total debt increased materially in 2024–2025 versus earlier years, and the 2025 return on equity is effectively near-zero (likely impacted by the same 2025 income statement anomaly), which is a watch item.

Cash Flow

Cash generation is a relative strength: operating cash flow and free cash flow are consistently positive, and free cash flow has generally tracked close to reported earnings (around ~87%–91% in 2020–2024). Free cash flow growth is strong in several years, including a notable acceleration in 2023 and continued growth into 2024, and the 2025 annual figure shows another large increase. The key weakness is that operating cash flow covers only about ~0.20–0.31 of total debt across the period, implying debt paydown capacity is moderate rather than robust.

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

• Technical Analysis Sentiment: Negative
• Last Price: 50.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 50.04 is below the 20-day moving average (MA) of 60.41, below the 50-day MA of 65.36, and below the 200-day MA of 73.66, indicating a bearish trend. The MACD of -4.19 indicates Positive momentum. The RSI at 23.76 is Positive, neither overbought nor oversold. The STOCH value of 2.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSN.

Parsons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTS	80 Outperform	$9.65B	27.54	17.82%	0.70%	4.18%	16.05%
SPXC	76 Outperform	$9.32B	30.59	13.29%	―	12.60%	24.02%
DCI	67 Neutral	$9.69B	31.85	25.19%	1.28%	2.37%	-6.93%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RRX	61 Neutral	$11.66B	33.29	4.18%	0.97%	-4.99%	22.16%
MIDD	59 Neutral	$6.41B	-28.04	-8.50%	―	0.27%	-159.24%
PSN	57 Neutral	$5.30B	29.66	9.48%	―	-0.24%	389.03%

Parsons Corporate Events

Parsons Announces CHRO Transition and Leadership Succession Plan

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 one-time $250,000 cash bonus as part of her final service payment, recognizing her nearly five-year tenure modernizing the company’s HR enterprise, harmonizing benefits, enhancing leadership development, and helping drive record hiring and improved retention at a pivotal growth phase.

Effective April 1, 2026, Parsons is promoting Soo Lagasse, currently senior vice president of global talent acquisition and mobility, to CHRO, strengthening continuity in its “People First” strategy. Lagasse, who joined Parsons in 2021 and has led a major overhaul of global talent acquisition, expansion of university and intern programs, and implementation of data-driven workforce planning tools, is expected to reinforce HR as a strategic growth partner and support the company’s continued momentum in recruiting and talent development across its national security and infrastructure businesses.

The most recent analyst rating on (PSN) stock is a Hold with a $55.00 price target. To see the full list of analyst forecasts on Parsons stock, see the PSN Stock Forecast page.

Parsons Grants CEO Long-Term Performance-Based Equity Award

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 support long-term retention. The restricted units will vest annually over four years starting March 10, 2026, while the performance units will vest after a four-year period ending December 31, 2029, with payout tied to Parsons’ relative total shareholder return versus a custom peer group, reinforcing a pay-for-performance model that links Smith’s compensation to shareholders’ long-term returns and market positioning.

Under the plan, the performance stock units provide no payout at or below the 35th percentile of relative total shareholder return, reach a target $6 million payout at the 65th percentile, and can pay up to $9 million at or above the 75th percentile, with results interpolated between thresholds. The annualized face value of the grant is $2.5 million at target over four years, indicating a significant long-term incentive designed to support leadership continuity and potentially enhance investor confidence in the company’s strategic direction and value creation.

The most recent analyst rating on (PSN) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on Parsons stock, see the PSN Stock Forecast page.