Parsons (PSN) AI Stock Analysis

• Market Cap: $8.04B
• Dividend Yield: N/A
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 20.4
• Beta (1Y): 0.68
• Revenue Growth: 16.61%
• EPS Growth: 1279.09%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 96
• Industry: Industrial - Machinery
• EPS (TTM): 0.78
• Shares Outstanding: 106,874,985
• 10 Day Avg. Volume: 901,617
• 30 Day Avg. Volume: 1,073,491
• PEG Ratio: 0.09
• Price to Book (P/B): 3.20
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.11
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 6.23
• Enterprise Value/Ebitda: 4.81
• 1Y Price Target: $83.10
• Price Target Upside: 10.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 78 Outperform
• Price Target: $78.00 ▲(3.34%Upside)

Parsons' strong financial performance and positive technical indicators are significant strengths, supported by strategic earnings call outcomes. Valuation is reasonable, but the absence of a dividend yield and challenges from contract changes moderately impact the score.

Positive Factors

Domestic Infrastructure

Domestically, CI programs such as the Newark Air Train and Georgia State Route are ramping up, indicating potential growth in domestic infrastructure projects.

Portfolio Strength

Reiterate Buy on strong portfolio across end-markets.

Regional Sales Growth

CI provides some relief with rising sales in the Middle East, showing potential growth in this region.

Negative Factors

Earnings

Q2 EPS is estimated to be below consensus, which may reflect challenges the company is facing in meeting financial expectations.

Financial Outlook

The latest guidance revision lowered the 2025 sales by $700MM, affecting the company's financial outlook negatively.

Program Impact

The CP program represents a significant headwind, with a $105MM year-over-year impact due to its reduced scope and sluggish award environment.

Parsons Business Overview & Revenue Model

Company Description

Parsons Corporation, listed under the ticker symbol PSN, is a technology-driven engineering and infrastructure firm. The company primarily operates in the defense, intelligence, security, and critical infrastructure sectors. Parsons provides innovative solutions in cybersecurity, missile defense, space, connected communities, and smart cities, leveraging its expertise in engineering, technical services, and software development to deliver integrated solutions for government and commercial clients worldwide.

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 exhibits strong financial health with robust revenue growth and improved gross profit margins. The balance sheet is stable, and cash flow generation is strong, supporting consistent revenue and profit growth.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.75B	5.44B	4.20B	3.66B	3.92B
Gross Profit	1.41B	1.21B	946.72M	852.82M	876.86M
EBITDA	518.48M	415.52M	309.91M	274.49M	310.35M
Net Income	235.05M	161.15M	96.66M	88.95M	98.54M
Balance Sheet
Total Assets	5.49B	4.80B	4.20B	3.83B	3.94B
Cash, Cash Equivalents and Short-Term Investments	453.55M	272.94M	262.54M	342.61M	483.61M
Total Debt	1.42B	927.15M	914.17M	796.72M	826.60M
Total Liabilities	2.95B	2.43B	2.10B	1.89B	2.08B
Stockholders Equity	2.42B	2.29B	2.04B	1.90B	1.81B
Cash Flow
Free Cash Flow	474.39M	367.30M	206.93M	184.47M	255.13M
Operating Cash Flow	523.61M	407.70M	237.53M	205.57M	289.16M
Investing Cash Flow	-556.72M	-375.97M	-417.47M	-240.91M	-346.37M
Financing Cash Flow	218.75M	-21.87M	100.37M	-106.50M	348.23M

Parsons Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 75.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 Positive. The current price of 75.48 is above the 20-day moving average (MA) of 75.00, above the 50-day MA of 70.93, and below the 200-day MA of 79.15, indicating a neutral trend. The MACD of 1.42 indicates Positive momentum. The RSI at 58.53 is Neutral, neither overbought nor oversold. The STOCH value of 57.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSN.

Parsons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSN	78 Outperform	$8.04B	20.42	17.75%	―	16.61%	1279.09%
SPXC	77 Outperform	$8.43B	41.67	15.24%	―	10.78%	30.05%
FLS	76 Outperform	$7.17B	24.88	13.91%	1.49%	3.15%	14.18%
MIDD	72 Outperform	$7.98B	18.64	12.33%	―	-2.56%	11.51%
RRX	72 Outperform	$10.61B	45.56	3.69%	0.90%	-10.19%	―
GNRC	67 Neutral	$9.18B	26.36	14.29%	―	8.07%	58.67%
Sector *	57 Neutral	HK$14.24B	5.73	-5.77%	5.18%	9.65%	-43.80%

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.