Parsons (PSN) AI Stock Analysis

• Market Cap: $8.96B
• Dividend Yield: N/A
• Average Volume (3M): 926.18K
• Price to Earnings (P/E): 23.9
• Beta (1Y): 0.69
• Revenue Growth: -0.24%
• EPS Growth: 389.03%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 88
• Industry: Industrial - Machinery
• EPS (TTM): 0.86
• Shares Outstanding: 106,488,580
• 10 Day Avg. Volume: 948,270
• 30 Day Avg. Volume: 926,180
• PEG Ratio: 0.96
• Price to Book (P/B): 4.06
• Price to Sales (P/S): 1.45
• P/FCF Ratio: 20.67
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 7.07
• Enterprise Value/Ebitda: 13.85
• 1Y Price Target: $97.00
• Price Target Upside: 15.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 3.23
• Revenue Forecast (FY): $6.46B

• Rating: 67 Neutral
• Price Target: $90.00 ▲(6.98% Upside)

Parsons' overall score is driven by strong earnings call performance and operational efficiency, offset by challenges in cash flow management and valuation concerns. The company's strategic positioning and contract wins support a positive outlook, but revenue growth and cash flow issues need to be addressed.

Positive Factors

Strong Revenue Growth

Parsons' significant revenue growth in Critical Infrastructure reflects its ability to capitalize on market demand and expand its footprint, supporting long-term business sustainability.

Significant Contract Wins

Securing large contracts enhances Parsons' market position and revenue visibility, providing a stable foundation for future growth and competitive advantage.

Improved EBITDA Margins

Margin expansion through improved program performance and acquisitions indicates operational efficiency, which is crucial for long-term profitability.

Negative Factors

Cash Flow Management Issues

Declining free cash flow poses liquidity risks and may limit Parsons' ability to invest in growth opportunities, affecting long-term financial health.

Federal Solutions Revenue Challenges

Significant revenue decline in Federal Solutions due to contract issues could impact Parsons' overall revenue growth and market position in this segment.

Impact of Government Shutdown

Government shutdowns can disrupt operations and delay project timelines, affecting Parsons' ability to execute contracts and generate revenue.

Parsons Business Overview & Revenue Model

Company Description

Parsons Corporation (PSN) is a leading technology-driven solutions provider focused on critical infrastructure and defense. The company operates primarily in sectors including defense, intelligence, homeland security, and infrastructure, offering a wide range of services such as engineering, construction management, and cybersecurity. With a strong emphasis on innovation and sustainability, Parsons delivers cutting-edge solutions to complex challenges faced by government and commercial clients globally.

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 shows strong operational efficiency and return on equity but faces challenges in revenue growth and cash flow management. The company's leverage is moderate, and while profitability margins have improved, the decline in free cash flow growth poses a risk.

Income Statement

Parsons demonstrates a solid gross profit margin of 21.4% TTM, indicating efficient cost management. However, the net profit margin of 5.9% TTM shows room for improvement in profitability. Revenue growth has been negative at -2.8% TTM, reflecting challenges in expanding sales. The EBIT and EBITDA margins have improved to 9.4% and 11.0% TTM, respectively, suggesting better operational efficiency.

Balance Sheet

The debt-to-equity ratio of 0.59 TTM indicates a moderate level of leverage, which is manageable but could pose risks if increased. Return on equity has improved to 16.3% TTM, showcasing effective use of equity to generate profits. The equity ratio of 44.6% TTM reflects a stable capital structure with a good proportion of assets financed by equity.

Cash Flow

Free cash flow has declined by 26.4% TTM, which is a concern for liquidity. The operating cash flow to net income ratio of 0.36 TTM suggests that cash generation from operations is lower than net income, indicating potential cash flow management issues. However, the free cash flow to net income ratio remains strong at 0.91 TTM, indicating that most of the net income is converted into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.49B	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	731.00M	518.48M	415.52M	309.91M	274.49M	310.35M
Net Income	386.84M	235.05M	161.15M	96.66M	64.07M	98.54M
Balance Sheet
Total Assets	5.74B	5.49B	4.80B	4.20B	3.83B	3.94B
Cash, Cash Equivalents and Short-Term Investments	422.55M	453.55M	272.94M	262.54M	342.61M	483.61M
Total Debt	1.39B	1.42B	927.15M	916.41M	799.14M	828.33M
Total Liabilities	3.07B	2.95B	2.43B	2.10B	1.89B	2.08B
Stockholders Equity	2.56B	2.42B	2.29B	2.04B	1.90B	1.81B
Cash Flow
Free Cash Flow	382.83M	474.39M	367.30M	206.93M	184.47M	255.13M
Operating Cash Flow	437.63M	523.61M	407.70M	237.53M	205.57M	289.16M
Investing Cash Flow	-399.17M	-556.72M	-375.97M	-417.47M	-240.91M	-346.37M
Financing Cash Flow	-172.92M	218.75M	-21.87M	100.37M	-106.50M	348.23M

Parsons Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 84.13
• 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 Positive. The current price of 84.13 is above the 20-day moving average (MA) of 83.28, above the 50-day MA of 83.78, and above the 200-day MA of 72.59, indicating a bullish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 52.62 is Neutral, neither overbought nor oversold. The STOCH value of 53.21 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
DCI	78 Outperform	$10.45B	29.59	24.94%	1.30%	2.92%	-9.78%
SPXC	75 Outperform	$10.76B	46.05	12.76%	―	12.60%	24.02%
WTS	73 Outperform	$9.26B	28.66	17.81%	0.70%	4.18%	16.05%
RRX	69 Neutral	$9.67B	37.67	3.89%	0.99%	-4.99%	22.16%
PSN	67 Neutral	$8.96B	23.95	15.89%	―	-0.24%	389.03%
MIDD	64 Neutral	$5.93B	―	-6.20%	―	0.27%	-159.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Parsons Corporate Events

Parsons Corp Reports Q3 2025 Financial Results

Parsons Corporation is a leading technology provider in the national security and global infrastructure markets, specializing in areas such as cyber and electronic warfare, space and missile defense, and critical infrastructure protection. In its third quarter of 2025, Parsons reported a decrease in total revenue to $1.6 billion, a 10% drop year-over-year, but highlighted a 14% revenue growth excluding a confidential contract. The company achieved a net income of $64 million, down $8 million from the previous year, and an adjusted EBITDA of $158 million, representing a 5% decrease. Despite these declines, Parsons expanded its adjusted EBITDA margin by 60 basis points to 9.8% and maintained a book-to-bill ratio of 1.0x, with a total backlog reaching $8.8 billion, the highest level since its IPO.

Parsons Corp Shines Amid Challenges in Q3 Earnings Call

Parsons Corp’s recent earnings call paints a picture of robust performance in its Critical Infrastructure segment, marked by significant revenue growth and major contract wins. However, challenges loom in the Federal Solutions division due to reduced revenue from a confidential contract and the repercussions of a government shutdown on federal operations. Despite these hurdles, Parsons remains optimistic, buoyed by a strong pipeline and backlog that support a positive outlook.

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.