Parsons Corporation is not just transforming industries; it’s redefining the very fabric of our daily lives through cutting-edge solutions in defense and critical infrastructure. As a key player in the industrial machinery sector, Parsons excels in delivering innovative cyber security, intelligence services, and advanced engineering solutions. With a strong reputation for quality and market influence, I find myself questioning whether the company’s fundamentals still align with its current market valuation and growth potential as we look ahead.
Table of contents
Company Description
Parsons Corporation (NYSE: PSN), founded in 1944 and headquartered in Centreville, Virginia, is a prominent player in the industrial machinery sector. The company specializes in integrated solutions across defense, intelligence, and critical infrastructure markets, primarily serving clients in North America and the Middle East. It operates through two main segments: Federal Solutions and Critical Infrastructure, providing services such as cybersecurity, space and geospatial solutions, and missile defense systems. With approximately 20K employees, Parsons is committed to innovation in technology and infrastructure management, positioning itself as a leader in shaping the future of defense and critical systems integration.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of Parsons Corporation, examining its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table summarizes Parsons Corporation’s income statements over the past five fiscal years, highlighting key financial metrics.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 3.92B | 3.66B | 4.20B | 5.44B | 6.75B |
| Cost of Revenue | 3.04B | 2.81B | 3.25B | 4.24B | 5.34B |
| Operating Expenses | 699M | 720M | 761M | 918M | 978M |
| Gross Profit | 877M | 853M | 947M | 1.20B | 1.41B |
| EBITDA | 310M | 274M | 310M | 416M | 518M |
| EBIT | 182M | 130M | 189M | 296M | 419M |
| Interest Expense | 21M | 18M | 23M | 31M | 52M |
| Net Income | 98M | 64M | 97M | 161M | 235M |
| EPS | 0.98 | 0.62 | 0.93 | 1.56 | 2.21 |
| Filing Date | 2021-02-24 | 2022-02-23 | 2023-02-17 | 2024-02-14 | 2025-02-19 |
Interpretation of Income Statement
Over the five-year period, Parsons Corporation has demonstrated consistent revenue growth, rising from $3.92B in 2020 to $6.75B in 2024, reflecting a robust demand for its services. Net income has also increased significantly, from $98M to $235M, indicating improved profitability. Notably, gross margins have remained relatively stable, with slight enhancements in the most recent year, suggesting better cost management. The latest performance reflects a strong upward trend, although rising operating expenses and interest costs could pressure margins moving forward. Caution is advised as the company navigates these challenges while sustaining its growth momentum.
Financial Ratios
Below is a table summarizing the financial ratios for Parsons Corporation over the last few fiscal years.
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 2.51% | 1.75% | 2.30% | 2.96% | 3.48% |
| ROE | 5.43% | 3.37% | 4.73% | 7.05% | 9.73% |
| ROIC | 4.59% | 4.53% | 4.49% | 6.55% | 8.28% |
| P/E | 37.26 | 53.86 | 49.64 | 40.86 | 41.72 |
| P/B | 2.02 | 1.82 | 2.35 | 2.88 | 4.06 |
| Current Ratio | 1.55 | 1.58 | 1.55 | 1.52 | 1.29 |
| Quick Ratio | 1.55 | 1.58 | 1.55 | 1.52 | 1.29 |
| D/E | 0.46 | 0.42 | 0.45 | 0.41 | – |
| Debt-to-Assets | 20.99% | 20.70% | 21.78% | 19.30% | 25.89% |
| Interest Coverage | 8.49 | 7.48 | 8.01 | 9.16 | 8.30 |
| Asset Turnover | 0.99 | 0.96 | 1.00 | 1.13 | 1.23 |
| Fixed Asset Turnover | 11.82 | 12.76 | 16.70 | 21.08 | 25.51 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
Analyzing Parsons Corporation’s financial ratios for the fiscal year 2024 reveals a mixed picture of its financial health. The current ratio stands at 1.29, indicating adequate liquidity, while the quick ratio matches, suggesting solid short-term financial stability. However, the solvency ratio of 0.11 raises concerns about the company’s ability to meet long-term obligations. Profitability margins show weakness, with a net profit margin of only 3.48%, signaling potential inefficiencies. The price-to-earnings ratio of 41.72 suggests the stock may be overvalued, given its earnings yield of 2.40%. Overall, while liquidity appears strong, profitability and solvency ratios indicate areas that require attention for better risk management.
Evolution of Financial Ratios
Over the past five years, Parsons Corporation’s financial ratios have shown slight improvement in liquidity, with current ratios hovering around 1.29 to 1.55. However, profitability ratios have generally remained low, with net profit margins increasing gradually, reflecting ongoing operational challenges.
Distribution Policy
Parsons Corporation (PSN) does not currently pay dividends, reflecting a strategy focused on reinvestment for growth and innovation. The company is likely prioritizing research and development, as well as potential acquisitions, to enhance long-term shareholder value. While there are no dividends, PSN does engage in share buybacks, which can provide support for share prices. Overall, this approach appears aligned with sustainable value creation, provided the investments yield positive returns.
Sector Analysis
Parsons Corporation (PSN) operates within the Industrial – Machinery sector, focusing on integrated solutions in defense and critical infrastructure, facing competition from major players while leveraging its technological expertise and diverse service offerings.
Strategic Positioning
Parsons Corporation (PSN) holds a competitive position in the industrial machinery sector, focusing on defense and critical infrastructure. With a market cap of approximately $8.79B, it leverages advanced cybersecurity and geospatial solutions, catering primarily to the U.S. Department of Defense and intelligence agencies. The company faces competitive pressure from both established players and emerging tech firms, which creates a dynamic landscape. Ongoing technological disruptions, particularly in cybersecurity and infrastructure management, necessitate constant innovation to maintain its market share and meet evolving client needs.
Revenue by Segment
The pie chart illustrates Parsons Corporation’s revenue distribution by segment for the fiscal year 2024, highlighting the contributions of each segment to overall performance.
In 2024, Parsons Corporation’s revenue from the Critical Infrastructure Segment totaled 2.74B, while the Federal Solution Segment contributed 4.01B. The Federal Solution Segment was the primary driver of revenue, significantly outperforming the Critical Infrastructure Segment, which saw a notable decline from its prior year’s figure of 37M. This suggests a substantial shift in revenue concentration, with the Federal Solution Segment gaining importance. The most recent year’s performance indicates a potential risk in dependency on a single segment, as growth in the Critical Infrastructure Segment has slowed considerably.
Key Products
Parsons Corporation offers a diverse range of products and services across various sectors. Below is a table summarizing some of their key offerings:
| Product | Description |
|---|---|
| Cybersecurity Solutions | Integrated offensive and defensive cybersecurity platforms, tools, and operations tailored for the U.S. Department of Defense and intelligence agencies. |
| Geospatial Intelligence Services | Advanced space and geospatial solutions, including threat analytics and satellite ground systems for national defense agencies. |
| Missile Defense Systems | Comprehensive missile defense and C5ISR solutions, focusing on integrated air and missile defense and data fusion technologies for military applications. |
| Intelligent Transportation Systems | Management systems for transportation authorities, enhancing the safety and efficiency of rail and transit operations. |
| Environmental Solutions | Services for environmental management, nuclear waste processing, and infectious disease control analytics for both public and private sectors. |
| Smart Cities Software | Innovative software solutions designed to support the development and management of smart city infrastructure. |
These products reflect Parsons Corporation’s commitment to providing cutting-edge solutions in defense, intelligence, and critical infrastructure markets.
Main Competitors
No verified competitors were identified from available data. Parsons Corporation, operating in the Industrial – Machinery sector, has an estimated market share of around 2% within its niche, focusing on integrated solutions and services in defense, intelligence, and critical infrastructure markets. The company holds a competitive position through its diverse offerings and strong relationships with government agencies, particularly in North America.
Competitive Advantages
Parsons Corporation (PSN) boasts a robust portfolio in the defense, intelligence, and critical infrastructure sectors, underscored by its integrated solutions and specialized services. With a market capitalization of approximately $8.79B and a beta of 0.654, the company demonstrates stability and resilience. Looking ahead, Parsons is well-positioned to capitalize on emerging opportunities in cybersecurity and smart infrastructure technologies. The anticipated launch of advanced geospatial and missile defense solutions, along with expansion into international markets, could significantly enhance its competitive edge and drive future growth.
SWOT Analysis
The SWOT analysis below outlines the key strengths, weaknesses, opportunities, and threats for Parsons Corporation (ticker: PSN), providing a clear overview to inform strategic decisions.
Strengths
- Strong market presence
- Diverse service offerings
- Stable revenue streams
Weaknesses
- High reliance on government contracts
- Limited dividend history
- Vulnerability to budget cuts
Opportunities
- Expanding cybersecurity market
- Growth in infrastructure investment
- International market expansion
Threats
- Intense competition
- Regulatory changes
- Economic downturn risks
Overall, Parsons Corporation exhibits strong capabilities and opportunities for growth, particularly in cybersecurity and infrastructure. However, the company’s reliance on government contracts and external economic factors necessitates careful risk management and strategic diversification to mitigate potential threats.
Stock Analysis
Over the past year, Parsons Corporation (PSN) has demonstrated notable price movements, reflecting strong trading dynamics and a significant bullish trend.
Trend Analysis
Analyzing the stock over the past year, we observe a percentage change of +34.16%. This solid performance confirms a bullish trend, further supported by an acceleration status indicating increasing momentum. The highest price reached was 112.69, while the lowest was 58.22. The standard deviation of 12.88 suggests moderate volatility, which could signal varying investor sentiment during this period.
Volume Analysis
In the last three months, trading volumes have shown an increasing trend, with a total volume of approximately 576M shares. The buyer-driven activity, with 58.38% of the total volume attributed to buyers, indicates a healthy investor sentiment leaning towards accumulation. Recent volume data also reflects slightly buyer-dominant behavior, with buyers accounting for 54.28% of the activity, suggesting continued positive market participation.
Analyst Opinions
Recent recommendations for Parsons Corporation (PSN) indicate a strong consensus to buy, with an A- rating reflecting positive sentiment. Analysts highlight the company’s robust discounted cash flow score of 5, suggesting strong future cash generation potential. The return on equity and return on assets scores of 4 and 5, respectively, reinforce the efficient use of capital. Notably, the low debt-to-equity score of 1 indicates sound financial health. Overall, the consensus for PSN remains bullish, pointing to its solid fundamentals and growth prospects.
Stock Grades
Parsons Corporation (ticker: PSN) has recently received updated stock ratings from several reputable grading companies, reflecting a generally positive outlook.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| William Blair | Upgrade | Outperform | 2025-11-20 |
| Keybanc | Maintain | Overweight | 2025-10-20 |
| Truist Securities | Maintain | Buy | 2025-09-30 |
| Keybanc | Maintain | Overweight | 2025-09-29 |
| Baird | Maintain | Outperform | 2025-09-17 |
| Goldman Sachs | Downgrade | Neutral | 2025-08-13 |
| Keybanc | Maintain | Overweight | 2025-08-07 |
| Baird | Upgrade | Outperform | 2025-08-07 |
| Truist Securities | Maintain | Buy | 2025-07-24 |
| Keybanc | Maintain | Overweight | 2025-07-16 |
Overall, the trend shows a shift towards more favorable ratings, particularly with the recent upgrade from William Blair to “Outperform.” Despite a downgrade from Goldman Sachs, the majority of grades indicate a stable or improving outlook for Parsons Corporation.
Target Prices
The consensus target prices for Parsons Corporation (PSN) reflect a positive outlook from analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 107 | 90 | 95.5 |
Overall, analysts expect PSN to be in a favorable range, indicating confidence in the company’s growth potential.
Consumer Opinions
Consumer sentiment around Parsons Corporation (PSN) reflects a mix of appreciation and critique, showcasing the diverse experiences of its clients.
| Positive Reviews | Negative Reviews |
|---|---|
| “Exceptional project management skills!” | “Customer service could use improvement.” |
| “Innovative solutions for complex challenges.” | “Pricing seems higher than competitors.” |
| “Strong commitment to sustainability.” | “Occasional delays in project timelines.” |
Overall, consumer feedback indicates that while Parsons Corporation is lauded for its innovative solutions and project management, it faces criticism regarding customer service and pricing competitiveness.
Risk Analysis
In evaluating Parsons Corporation (PSN), I have identified several key risks that could impact the company’s performance. Below is a summary of these risks:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in demand for engineering services due to economic downturns. | High | High |
| Regulatory Risk | Changes in government policies affecting infrastructure projects. | Medium | High |
| Operational Risk | Potential delays in project execution and cost overruns. | High | Medium |
| Competitive Risk | Increased competition from emerging firms in the engineering sector. | Medium | Medium |
I find that the most likely and impactful risks are market and operational risks, given the current economic climate and the nature of Parsons’ projects. As recent trends show ongoing volatility, it’s crucial to monitor these factors closely.
Should You Buy Parsons Corporation?
Parsons Corporation (PSN) has shown a positive net margin of 3.48% in its latest fiscal year, indicating profitability. The company’s total debt stands at 1.42B, which reflects a manageable debt-to-equity ratio of 0.588, suggesting it is not overly reliant on debt for financing. Over the recent years, the company’s fundamentals have improved, highlighted by a revenue increase of 15.44% in the latest year. The company holds an A- rating, indicating a strong overall performance.
Favorable signals The positive net margin of 3.48% demonstrates the company’s ability to generate profit. The revenue growth of 15.44% is a strong indicator of the company’s ability to increase sales effectively. Additionally, the A- rating reflects a solid standing in the market, suggesting investor confidence.
Unfavorable signals The company’s return on invested capital (ROIC) of 8.28% is below the weighted average cost of capital (WACC) of 6.10%, indicating value destruction. Furthermore, the total debt of 1.42B could potentially pose a risk if not managed effectively in the future.
Conclusion Given the positive net margin, revenue growth, and solid rating, the company might appear favorable for long-term investors. However, the situation is tempered by value destruction indicated by ROIC being less than WACC, suggesting caution. Therefore, it would be preferable to wait to see how the company manages its debt and continues its growth trajectory.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Looking Into Parsons Corp’s Recent Short Interest – Benzinga (Nov 24, 2025)
- Creative Planning Grows Stock Position in Parsons Corporation $PSN – MarketBeat (Nov 22, 2025)
- How Major U.S. Defense Contract Wins Could Shape Parsons (PSN) Investment Outlook – Yahoo Finance (Nov 23, 2025)
- UBS Initiates Coverage of Parsons (PSN) with Buy Recommendation – Nasdaq (Nov 20, 2025)
- Parsons Corporation: Why I Am Maintaining My Buy Rating (NYSE:PSN) – Seeking Alpha (Oct 30, 2025)
For more information about Parsons Corporation, please visit the official website: parsons.com
