One-glance verdict
Undervalued
$114.60 our estimate vs market $44.15
Wall Street consensus: $58.36 (-49.1% lower than our fair-value estimate)
61% below our estimate, below the bear case
Fundamentals snapshot
Parsons Corporation
PSN · NYQ · Technology · Information Technology Services
Current price
$44.15
52-week range
$36.26 - $88.00
Market cap
$4.72B
Balance sheet
Watch
8.10x Adequate
Net debt $1.38B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 9/10 years.
- Risk Net debt grew 40.1% over 3 years.
- Risk Operating margin compressed from 4.0% to 2.2% over 3 years.
What this company does
Parsons Corporation
Parsons Corporation sells technology and engineering services, primarily to the U.S. government and for building important infrastructure like airports and highways. A big part of their money comes from government contracts for things like cybersecurity and defense systems, and from developing smart city technology. This matters because their work helps keep the country safe and modernizes essential services.
How the company got here
Parsons Corporation has a long history, starting in 1944 as a small engineering firm. It grew by taking on complex projects, particularly for the U.S. government. Over the decades, the company expanded its expertise into new areas like technology and software, adapting to changing national needs. This evolution has shaped Parsons into a company that blends traditional engineering with cutting-edge digital solutions for both government and infrastructure clients.
What it actually does
Parsons Corporation provides a range of services that help design, build, and manage important projects. Think of them as a company that helps the government and other organizations tackle big, complicated challenges. This can involve everything from designing new roads and bridges to creating advanced technology for national defense and cybersecurity. They offer both the engineering know-how and the smart software needed to make these projects successful.
Federal Solutions
This part of Parsons focuses on serving the United States federal government, offering a wide array of high-tech solutions. These include advanced cybersecurity (protecting computer systems from attacks), missile defense (stopping incoming missiles), and intelligence gathering. They also work on space systems, electronic warfare (disrupting enemy electronics), and even border security. Essentially, this segment provides critical technologies and expertise to support national security and government operations, making up a significant portion of the company's business.
Critical Infrastructure
The Critical Infrastructure segment is all about improving the systems that societies rely on every day. This includes designing and managing projects for transportation like airports, railways, roads, and bridges. They also work on water systems and other essential utilities. Parsons provides both the engineering and planning services, as well as digital solutions to make these infrastructures smarter and more efficient. This segment represents another major way Parsons generates revenue.
What management is betting on now
Parsons is focusing heavily on expanding its digital offerings across both its government and infrastructure businesses. They are investing in smart software and data analytics to make their solutions more advanced and effective. The goal is to help clients navigate complex challenges with innovative technology, particularly in areas like cybersecurity and intelligent transportation. This strategic shift aims to position Parsons as a leader in digital transformation for critical sectors.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$151.97M
FY2024 Q3
$287.29M
FY2024 Q4
$108.00M
FY2025 Q1
$-25.26M
FY2025 Q2
$150.37M
FY2025 Q3
$149.73M
FY2025 Q4
$135.58M
FY2026 Q1
$-18.62M
Revenue
$1.49B
Net income
$52.93M
Diluted EPS
0.49
Operating cash flow
$-3.70M
Free cash flow
$-18.62M
Fetching…
Sources
Revenue
$1.60B
Net income
$55.58M
Diluted EPS
0.51
Operating cash flow
$167.52M
Free cash flow
$135.58M
Fetching…
Sources
Revenue
$1.62B
Net income
$64.12M
Diluted EPS
0.59
Operating cash flow
$162.85M
Free cash flow
$149.73M
Fetching…
Sources
Revenue
$1.58B
Net income
$55.23M
Diluted EPS
0.50
Operating cash flow
$159.80M
Free cash flow
$150.37M
Fetching…
Sources
Revenue
$1.55B
Net income
$66.20M
Diluted EPS
0.60
Operating cash flow
$-11.79M
Free cash flow
$-25.26M
Fetching…
Sources
Revenue
$1.73B
Net income
$54.18M
Diluted EPS
0.49
Operating cash flow
$126.77M
Free cash flow
$108.00M
Fetching…
Sources
Revenue
$1.81B
Net income
$71.95M
Diluted EPS
0.65
Operating cash flow
$299.03M
Free cash flow
$287.29M
Fetching…
Sources
Revenue
$1.67B
Net income
$69.17M
Diluted EPS
0.63
Operating cash flow
$161.23M
Free cash flow
$151.97M
Fetching…
Sources
Is it cheap or expensive?
Fair value $114.60 vs current price $44.15
Wall Street consensus is the average analyst price target: $58.36 (-49.1% lower than our fair-value estimate).
Our most-likely fair value is $114.60 a share — about 159.6% above today's price of $44.15, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $1.4B. Interest coverage 8.1x.
Net debt
$1.38B
Interest coverage
8.10x
Parsons Corporation's profit covers its interest bill about 8.1 times over. which is stronger than every peer shown here.
Watch
Worse cushion
Baseline
Better cushion
PSN
BASELINE
Parsons Corporation
Total debt $1.65B Interest coverage 8.10x This is the baseline the peer rows are being compared against.
Total debt $2.80B Interest coverage 3.59x -56% vs PSN Carries about 2.3x less debt cushion than PSN.
Total debt $2.70B Interest coverage 4.07x -50% vs PSN Carries about 2.0x less debt cushion than PSN.
Total debt $3.33B Interest coverage 5.75x -29% vs PSN Carries about 1.4x less debt cushion than PSN.
Total debt $4.16B Interest coverage 4.97x -39% vs PSN Carries about 1.6x less debt cushion than PSN.
Total debt $5.38B Interest coverage 4.27x -47% vs PSN Carries about 1.9x less debt cushion than PSN.
What you should know
The case for and against PSN
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 9/10 years.
Risks
-
Net debt grew 40.1% over 3 years.
-
Operating margin compressed from 4.0% to 2.2% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.45x
Forward P/E
12.91x
P/B
1.79x
P/S
0.75x
EV/EBITDA
13.20x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
22.0%
Operating margin
2.2%
Net margin
2.5%
ROE
8.2%
ROA
3.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.60x
Current ratio
1.66x
Quick ratio
1.51x
Total debt
$1.65B
Total cash
$266.04M
Growth
How the business has been compounding
Revenue TTM
$6.30B
Revenue 5Y CAGR
14.8%
EPS TTM
1.45
EPS 5Y CAGR
36.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$486.47M
Free CF TTM
$410.41M
FCF margin
6.5%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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