Parsons (PSN) AI Stock Analysis

• Market Cap: $8.91B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.78
• Revenue Growth: 9.22%
• EPS Growth: 616.60%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 88
• Industry: Industrial - Machinery
• EPS (TTM): 0.78
• Shares Outstanding: 106,793,840
• 10 Day Avg. Volume: 737,840
• 30 Day Avg. Volume: 1,011,287
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.36
• Enterprise Value/Gross Profit: 6.34
• Enterprise Value/Ebitda: 12.35
• 1Y Price Target: $88.40
• Price Target Upside: 6.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 75 Outperform
• Price Target: $93.00 ▲(12.40% Upside)

Parsons' strong earnings call guidance and bullish technical indicators are the most significant factors driving the score. Financial performance shows solid profitability but is tempered by recent revenue and cash flow challenges. Valuation is moderate, with no dividend yield to enhance appeal.

Positive Factors

Strategic Contract Wins

Securing large contracts enhances revenue visibility and strengthens Parsons' market position in defense and infrastructure sectors.

Strong Revenue Growth Projections

Projected revenue growth indicates robust demand for Parsons' services, supporting long-term business expansion and market competitiveness.

High Cash Flow Conversion

Efficient cash conversion enhances financial flexibility, enabling Parsons to invest in growth opportunities and manage debt effectively.

Negative Factors

Federal Solutions Revenue Decline

Declining revenue in Federal Solutions could impact overall growth, highlighting challenges in maintaining government contract volumes.

Increased SG&A Expenses

Rising SG&A expenses can pressure margins, reducing profitability unless offset by higher revenue or cost efficiencies.

Federal Solutions Margin Pressure

Margin pressure in Federal Solutions may affect overall profitability, necessitating strategic adjustments to improve contract mix.

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 generates revenue through multiple streams, primarily from contracts with government entities, including the Department of Defense and various federal agencies. The company earns money by providing specialized consulting, engineering, and construction services, often through long-term contracts. Key revenue streams include project management, defense systems development, and cybersecurity services. Additionally, Parsons benefits from strategic partnerships with other firms in the defense and technology sectors, enhancing its capabilities and market reach, which further contributes to its earnings.

Parsons Financial Statement Overview

Summary

Parsons demonstrates strong profitability and operational efficiency with improving margins and return on equity. However, recent revenue decline and negative free cash flow growth pose challenges. The balance sheet remains robust with moderate leverage, supporting financial stability.

Income Statement

Parsons has demonstrated strong profitability with a consistent gross profit margin around 21-23% and improving net profit margins, reaching 5.9% in the TTM. However, recent revenue growth has been negative, indicating potential challenges in maintaining sales momentum. The EBIT and EBITDA margins have shown improvement, reflecting operational efficiency gains.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.59, indicating a balanced approach to leveraging. Return on equity has improved significantly to 16.3% in the TTM, showcasing effective use of equity capital. The equity ratio remains stable, suggesting a solid capital structure.

Cash Flow

Operating cash flow has increased, but free cash flow growth has been negative recently, raising concerns about cash generation sustainability. The free cash flow to net income ratio is strong, indicating efficient cash conversion, although the decline in free cash flow growth warrants attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.68B	6.75B	5.44B	4.20B	3.66B	3.92B
Gross Profit	1.43B	1.41B	1.21B	946.72M	852.82M	876.86M
EBITDA	735.47M	518.48M	415.52M	309.91M	274.49M	310.35M
Net Income	394.67M	235.05M	161.15M	96.66M	64.07M	98.54M
Balance Sheet
Total Assets	5.72B	5.49B	4.80B	4.20B	3.83B	3.94B
Cash, Cash Equivalents and Short-Term Investments	411.33M	453.55M	272.94M	262.54M	342.61M	483.61M
Total Debt	1.47B	1.42B	927.15M	914.17M	796.72M	826.60M
Total Liabilities	3.10B	2.95B	2.43B	2.10B	1.89B	2.08B
Stockholders Equity	2.52B	2.42B	2.29B	2.04B	1.90B	1.81B
Cash Flow
Free Cash Flow	520.39M	474.39M	367.30M	206.93M	184.47M	255.13M
Operating Cash Flow	573.81M	523.61M	407.70M	237.53M	205.57M	289.16M
Investing Cash Flow	-632.38M	-556.72M	-375.97M	-417.47M	-240.91M	-346.37M
Financing Cash Flow	-57.43M	218.75M	-21.87M	100.37M	-106.50M	348.23M

Parsons Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 82.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 82.74 is below the 20-day moving average (MA) of 85.33, above the 50-day MA of 81.60, and above the 200-day MA of 72.69, indicating a neutral trend. The MACD of 0.36 indicates Positive momentum. The RSI at 47.23 is Neutral, neither overbought nor oversold. The STOCH value of 33.54 is Neutral, 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
DCI	―	$9.69B	27.16	24.94%	1.38%	2.92%	-9.78%
WTS	―	$9.11B	29.63	17.75%	0.69%	2.96%	12.62%
PSN	―	$8.91B	23.35	16.67%	―	9.22%	616.60%
SPXC	―	$9.74B	44.04	15.02%	―	8.90%	29.18%
RRX	―	$9.61B	38.47	3.84%	0.99%	-7.88%	―
MIDD	―	$6.34B	15.90	12.06%	―	-1.70%	10.24%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Parsons Corporate Events

Parsons Corp Reports Mixed Q2 2025 Results

Parsons Corporation is a leading provider of disruptive technology solutions in the national security and global infrastructure sectors, known for its work in cyber and intelligence, space and missile defense, and critical infrastructure protection.

Parsons Corp Shines in Earnings Call with Strong Growth

Parsons Corporation’s recent earnings call paints a picture of robust performance, marked by significant revenue growth, record margins, and impressive contract acquisitions. Despite some challenges, such as a decrease in total revenue due to a confidential contract and a drop in federal solutions margins, the overall sentiment remains optimistic with strong growth in key segments and strategic acquisitions driving the positive outlook.