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What this page is: Delvantic's full research page for Parsons Corporation (PSN) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Watch · Gem Score -2 (−100…+100 Quality+Value blend) · Quality 44 · Value -40 · Sentiment -67 (timing only, not weighted) · Composite fair value $56.24 vs $47.25 at analysis
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Parsons Corporation
PSN NYSEParsons Corporation is a technology-focused engineering and solutions company serving the defense, intelligence, and critical infrastructure markets worldwide. The company delivers integrated systems, software, and professional services that support national security missions, cyber and intelligence operations, space and missile defense, and critical infrastructure protection. Through its Federal Solutions segment, Parsons Corporation provides advanced capabilities such as cybersecurity, electronic warfare, geospatial and signals intelligence, space launch and ground systems, border security, biometrics, and environmental remediation to U.S. government agencies and allied institutions. Its Critical Infrastructure segment focuses on transportation, aviation, rail and transit, bridges, roads, tunnels, and water and wastewater systems, offering planning, design, engineering, digital twins, AI/ML, and systems integration services to modernize and manage complex infrastructure networks. Headquartered in Chantilly, Virginia and founded in 1944, Parsons Corporation occupies a key role at the intersection of national security and global infrastructure, providing technology-driven solutions to public-sector and commercial clients across North America, the Middle East, and other international markets.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.20
Total Equity: $2.77B
Shares: 109,693,000
Total Debt: $1.24B
Cash: $466.39M
EBITDA: $534.56M
Total Debt: $1.24B
Cash: $466.39M
Revenue: $6.36B
Revenue: $6.36B
Revenue: $6.36B
Total Equity: $2.77B
Tax Rate: 19.3%
Equity: $2.77B
Total Debt: $1.24B
Cash: $466.39M
Current Liabilities: $1.53B
Long-Term Debt: $1.24B
Total Debt: $1.24B
Total Equity: $2.77B
Shares: 109,693,000
Shares: 109,693,000
CapEx: -$67.97M
Shares: 109,693,000
Stock Price: $46.57
Net Income: $241.14M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 3, 2026 12:04pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.7B | $4.2B | $5.4B | $6.8B | $6.4B |
| Cost of Revenue | $2.8B | $3.2B | $4.2B | $5.3B | $4.9B |
| Gross Profit | $852.8M | $946.7M | $1.2B | $1.4B | $1.4B |
| Operating Expenses | $720.4M | $761.1M | $917.7M | $978.4M | $1.0B |
| Operating Income | $132.4M | $185.7M | $288.4M | $428.1M | $418.1M |
| Net Income | $64.1M | $96.7M | $161.1M | $235.1M | $241.1M |
| EBITDA | $276.7M | $306.2M | $408.3M | $527.3M | $534.6M |
| EPS | $0.62 | $0.93 | $1.53 | $2.21 | $2.26 |
| EPS (Diluted) | $0.59 | $0.87 | $1.42 | $2.12 | $2.20 |
Balance Sheet (Annual)
Last updated: Aug 3, 2026 11:33am (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $342.6M | $262.5M | $272.9M | $453.5M | $466.4M |
| Total Current Assets | $1.6B | $1.7B | $2.1B | $2.5B | $2.7B |
| Total Assets | $3.8B | $4.2B | $4.8B | $5.5B | $5.8B |
| Current Liabilities | $1.0B | $1.1B | $1.4B | $1.9B | $1.5B |
| Long-Term Debt | $591.9M | $743.6M | $746.0M | $784.1M | $1.2B |
| Total Liabilities | $1.9B | $2.1B | $2.4B | $3.0B | $3.0B |
| Total Equity | $1.9B | $2.1B | $2.4B | $2.5B | $2.8B |
| Retained Earnings | -$53.5M | $43.1M | $203.7M | $426.8M | $661.2M |
Cash Flow (Annual)
Last updated: Aug 3, 2026 12:04pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $205.6M | $237.5M | $407.7M | $523.6M | $478.4M |
| Capital Expenditure | -$21.1M | -$30.6M | -$40.4M | -$49.2M | -$68.0M |
| Free Cash Flow | $184.5M | $206.9M | $367.3M | $474.4M | $410.4M |
| Acquisitions (net) | -$198.3M | -$379.5M | -$221.9M | -$428.7M | -$145.1M |
| Net Debt Issued / (Repaid) | — | — | — | — | — |
| Dividends Paid | $0 | — | — | — | — |
| Stock Buybacks | -$21.7M | -$22.0M | -$11.0M | -$25.0M | -$125.0M |
| Net Change in Cash | -$143.3M | -$81.3M | $10.4M | $180.6M | $12.8M |
Growth Trends (YoY %)
Last updated: Aug 3, 2026 12:04pm (20d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +14.6% | +29.7% | +24.0% | -5.7% |
| Gross Profit Growth | +11.0% | +27.4% | +16.6% | +1.8% |
| Operating Income Growth | +40.2% | +55.3% | +48.4% | -2.3% |
| Net Income Growth | +50.9% | +66.7% | +45.9% | +2.6% |
| EBITDA Growth | +10.7% | +33.4% | +29.1% | +1.4% |
Deep Analysis
Risk : Reward — if the last quarter repeats
Live · as of 2026-08-19 10:58Recovery pays +28%; another quarter like the worst recent one costs 63%. Ratio 0.4:1.
| Case | Growth | Margin | Fair value | vs price ($47.25) |
|---|---|---|---|---|
| Bull — recovery | +1% | 9.2% | $60.25 | +28% |
| Base — stabilizes | +1% | 8.0% | $51.99 | +10% |
| Bear — keeps slipping | +0% | 6.8% | $43.96 | -7% |
| Stress — last quarter repeats | -10% | 3.8% | $17.62 | -63% |
Narrative Economics
market-narrative step).
Claude Reading
The revenue trajectory here is the whole story, and it's uglier than the CAGRs suggest. Q3 2024 printed $1.81B, then Q4 2024 $1.73B, then a stair-step down through 2025 ($1.55B → $1.58B → $1.62B → $1.60B) and now Q1 2026 at $1.49B — the lowest print in the eight-quarter window and down 3.9% YoY vs the already-weak Q1 2025 comp. The "accelerating quarterly trend" tag in Secondary Signals is wrong or backward-looking; sequentially, Q1 2026 is a fresh low. Full-year 2025 revenue of $6.36B was down 5.8% from $6.75B in 2024, and the run-rate implied by Q1 2026 ($5.96B annualized) points to another down year. Meanwhile net margins have compressed from ~4% to 3.5%, so the "margin expansion runway" bull thesis in Thesis Evaluation is fighting the tape. Earnings CAGR of 22.3% is a base-effect artifact from 2021's $64M NI — it does not describe the current regime.
That said, the fundamentals are not broken. FCF of $410M against a $4.72B market cap is a 8.7% FCF yield, EV/EBITDA at 10.8x is reasonable for a government-services roll-up, debt/equity of 0.45 is manageable, and $466M cash gives optionality. The insider activity in May 2026 is genuinely notable: six separate P-Purchase transactions totaling ~42,500 shares clustered in a single week is not routine — that's someone (or several someones) with a view on near-term contract awards or backlog inflection buying at ~$45-47. Award grants alone I'd dismiss; open-market purchases in this size and cluster I would not. This is the strongest bull signal in the file and the market-forces model correctly flags it as binary.
Where I part ways with the synthesis: "fair value $49-53" implies you're paying ~14% below fair for a company whose revenue just hit a fresh quarterly low with margin compression. That's not fair value — that's a value trap setup unless the insider-buying thesis proves right. The narrative-economics layer calling this a "steady compounder" with "minimal narrative intensity" is mis-framed; a stock down 48% from $89 to $46 is not being priced as a steady compounder — the market is pricing in real revenue erosion, and the anchored/fundamentals-doing-90%-of-work claim is inconsistent with the multiple compression from ~1.5x P/S peak to 0.8x now. The contrarian argument here is not that Parsons is cheap — it's that if you strip out the insider signal, you have a mid-single-digit-margin services business with declining revenue trading at 21x earnings and 10.8x EBITDA, which is not obviously cheap for a decelerating name. The bull case requires believing (a) Q1 2026 is trough, (b) insider buyers know something about H2 2026 awards, and (c) defense/intel budget flows resume. Absent (a) and (b), $46 could easily see $38.
Data quality flags: the 2026-Q1 print is the only 2026 data point, so we're extrapolating from one quarter; the insider transactions lack named filers (all "?"), which weakens interpretability — I'd want to know if it's the CEO/CFO or lower-level officers before pounding the table; and the "In Line With Sector" tag masks that peers like Leidos and Booz Allen have had their own recent stumbles, so relative comfort isn't much comfort. I'd take a partial-dissent stance from the synthesis: not "fair value with mild upside," but "fairly-to-slightly-overvalued on the trailing numbers, with a real but unproven insider-driven catalyst option." Fair value on current run-rate and margins is closer to $42-45 (0.7x P/S × $5.96B run-rate revenue / 101M shares roughly, or ~11x $410M FCF discounted for declining top line). To justify $53+, you need the Q2/Q3 2026 prints to show sequential revenue stabilization above $1.55B and margins holding at 3.5%+. I'd wait for the Q2 print rather than anchor to a composite DCF that assumes reversion.
GPT Reading
What jumps out is that Parsons is being priced like a low-quality contractor just as the financial profile has become meaningfully better than that label. Over five years, revenue rose from $3.66B to $6.36B, operating income from $132M to $418M, and net income from $64M to $241M. That is not a stagnant services story. Even after the 2025 revenue dip from $6.75B to $6.36B, operating margin only slipped from 6.3% to 6.6% if you use the reported annual figures correctly, meaning profitability held up far better than the top line. Gross profit actually increased slightly from $1.41B to $1.43B despite lower revenue, implying mix and execution were not deteriorating in tandem with sales. At $46.57, the stock trades at about 0.8x sales, 10.8x EV/EBITDA, and 21x earnings for a business converting $478M of operating cash flow into $410M of free cash flow. On market cap alone, that is roughly an 8.7% FCF yield. For a government-facing, consistently profitable operator with debt/equity of 0.45 and a current ratio of 1.75, that is not demanding.
The recent quarter pattern is softer than the long-term picture, but it still does not justify a near-halving from prior highs unless you assume a more serious structural break. Quarterly revenue has come down from the 2024 peak zone of $1.67B-$1.81B to $1.49B-$1.62B through 2025 and into 2026, yet net income has remained in a relatively tight band of $53M-$66M most quarters. Net margins are not great, but they are stable: mostly 3.5%-4.3%. That stability matters. If the business were losing contract quality, I would expect sharper margin giveback before or alongside the revenue decline. Instead, annual net income still edged up from $235M to $241M in 2025. The market seems to be extrapolating the top-line decline while ignoring that Parsons appears to have defended economics and cash generation. The insider tape supports that interpretation: clustered open-market purchases in May 2026 totaling over 42,000 shares are much more informative than routine awards. Insiders do not buy because a stock is optically cheap on sales; they buy when they think the earnings base and contract outlook are better than the tape suggests.
I also think some of the model language overstates the “binary turnaround” framing. This does not read like a turnaround. Turnarounds have stressed balance sheets, collapsing margins, or negative cash conversion. Parsons has none of those. Net debt is roughly $770M against $2.77B of equity, and annual free cash flow of $410M gives it real flexibility. The better way to frame it is as a de-rated compounder that has hit a growth air pocket. If revenue simply stabilizes around the current $6.0B-$6.4B range and operating margin stays near 6.5%, the current enterprise value looks entirely reasonable to cheap. If revenue resumes even mid-single-digit growth, today’s multiple likely proves too low. A business with 9.5% ROIC and high government exposure will never deserve a premium software multiple, but it also should not trade as if decline is the base case when earnings and cash flow have plainly not declined.
The best counterargument is straightforward: the revenue slowdown may be more serious than I am giving it credit for. The quarterly sequence from $1.81B in 2024-09 to $1.73B, then $1.55B, $1.58B, $1.62B, $1.60B, and now $1.49B is not just noise; it is an unmistakable downshift. Annual revenue fell nearly 6% in 2025, and the most recent quarter was down about 4% year over year versus $1.55B in 2025-03. If Parsons is maturing into a lower-growth, lower-multiple government contractor, then 21x earnings is not especially cheap, because 3.8% net margins leave little room for execution mistakes. A bear would also point out that the company’s returns, while decent, are not exceptional: 8.7% ROE and 9.5% ROIC are fine, not elite, and those metrics do not scream hidden gem. On that view, the stock is not mispriced; it is simply resetting from a period when investors paid up for defense and infrastructure exposure that now looks less scarce.
What would change my mind is evidence that the revenue air pocket is becoming an earnings problem. If the next few quarters show revenue staying below $1.5B without a recovery and net margin slips toward 2.5%-3.0%, then the current FCF and earnings base is not durable enough to support a bullish stance. Likewise, if annual free cash flow falls materially below $300M, the “cheap on cash generation” case weakens fast. On the other hand, if Parsons can print even one or two quarters back above $1.6B of revenue while holding quarterly net income above $60M, I think the market will have to re-rate the shares toward at least the low-to-mid $50s. At today’s price, I think the market is paying too much attention to the top-line dip and too little to the resilience of profit and cash flow.
Grok Reading
The raw numbers tell a story of a government contractor that sprinted from 2021 through 2024 and then hit a contract-timing wall. Revenue nearly doubled from $3.66B to $6.75B over four years, then slipped 5.8% to $6.36B in 2025, with the most recent quarter (Q1 2026) printing $1.49B—the weakest top-line print in the entire eight-quarter series. Yet profitability refused to crack: net income actually edged higher year-over-year to $241M from $235M, operating income held near $418M, and free cash flow came in at a robust $410M on only $68M of capex. That is an 8.7% FCF yield at the current $4.72B market cap. Margins have been remarkably sticky—gross around 22.5%, operating 6.6%, net 3.8%—through both the growth years and the pullback, which undercuts any narrative of structural margin compression. Balance sheet is clean enough: $1.24B debt against $466M cash and $2.77B equity (D/E 0.45), current ratio 1.75. ROIC of 9.5% and ROE of 8.7% are modest but consistent with a capital-light services model that converts nearly all operating cash to free cash. The valuation multiples—0.80x sales, 10.8x EV/EBITDA, 21x earnings—are pricing this franchise as if the 2025 revenue dip is permanent stagnation rather than the normal lumpiness of federal contract awards. Significant insider open-market purchases totaling roughly 42,500 shares across multiple days in May 2026, right into the weakness, reinforce that management sees the discount as real.
The market’s 48% drawdown from the $89 peak is doing most of the pricing work here, not a fundamental collapse. Trailing earnings still grew 2.6% even as revenue fell 5.7%, and the five-year earnings CAGR of 22% dwarfs the 8% revenue CAGR—evidence of operating leverage and mix improvement that the 0.8x price-to-sales multiple simply ignores. At $46.57 the stock sits modestly below the composite fair-value cluster around $49–53; the gap is not enormous, but the cash generation and insider signal make the asymmetry attractive for a mature earner with durable defense and infrastructure exposure.
The strongest counter-argument is straightforward and quantitative: revenue has now declined for multiple sequential quarters, the Q1 2026 print of $1.49B is accelerating lower, and there is no backlog disclosure in the briefing to prove the trough is temporary. A skeptic would note that the 2024 peak of $6.75B may have included one-time or pull-forward awards, that government IT services face perpetual recompete and price pressure, and that a 21x P/E is hardly distressed if growth has structurally reset to low-single-digits or worse. The bear case also correctly flags that margin expansion—the bull’s favorite lever—depends on mix shift toward higher-value cyber and software work that has not yet shown up decisively in the 3.5–4% net margins. Those points have weight; I simply weigh the $410M FCF, the multi-year earnings compounding, the fortress conversion of EBITDA to cash, and the cluster of insider buying more heavily than a few soft revenue quarters in a lumpy federal contractor.
What flips the verdict is clear: two more quarters of sub-$1.50B revenue without an offsetting backlog announcement or margin step-up would confirm a structural growth problem and push the stock toward overvalued at anything above $40. Conversely, a return to $1.65B-plus quarterly revenue or explicit FY guidance restoring mid-single-digit growth would force a re-rating toward the mid-$50s and raise conviction materially.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Parsons has executed a genuine operating-quality improvement: revenue nearly doubled from 3.66B in 2021 to 6.75B in 2024 before slipping to 6.36B in 2025, while operating margin climbed every year from 3.6% to 6.6% and net income marched from 64M to 241M. FCF of 410M in 2025 (against 235M net income, OCF/NI 2.48x) and accruals of -4.3% of assets indicate the earnings are real, corroborated by Beneish M of -2.7. Gross margin is range-bound at 21-23%, typical of the government-services model, so the incremental profitability is coming from scale and mix, not pricing power. Capital allocation is shareholder-friendly for the category: diluted shares shrank from 112.1M to 109.7M (-0.6% CAGR), buybacks run 115.7% of SBC, and SBC itself is a modest 0.7% of revenue. The balance sheet is the sole real constraint: net debt of -771M against 466M cash puts Altman Z at 2.69 (grey zone), so the company is self-funding via 410M FCF but has no cushion for a downcycle or a botched acquisition. Insider behavior reinforces the read: six open-market P-purchases totaling roughly 2.1M in May 2026 by the CEO (Smith), a director (McMahon), Holdsworth and Ball, with zero sales - unusual conviction for a mature name.
Verify before trusting this (6)
- Cause of 2025 revenue decline (-5.8%) - contract roll-off, divestiture, or federal budget delay?
- Debt maturity schedule and covenants behind the 1.2B+ gross debt implied by net cash figure
- Backlog and book-to-bill trends by segment (Federal Solutions vs Critical Infrastructure)
- Customer concentration, especially top federal agency exposure
- Whether recent M&A explains the debt load and any goodwill/intangibles risk
- Sustainability of 2.48x OCF/NI - is working capital release temporary?
The composite fair value of $49.36 sits just 4% above the $47.25 price; the signal-adjusted $53.05 stretches that to 13% upside, which is within noise for a leveraged mid-cap government services name. The method spread is wide and revealing: DCF at $65.07 assumes durable growth and margin expansion, EPV floor at $39.04 says the current earnings power alone justifies ~17% less than today, and the anchored-PE at $28.24 is a runaway low-end that likely reflects a compressed multiple against depressed or normalized earnings — I would not weight it heavily but it is a useful reminder that on trailing multiples this is not obviously cheap.
Verify before trusting this (4)
- organic (ex-M&A) revenue growth trajectory in next 2 quarters to test the 2025 dip narrative
- backlog book-to-bill and any repricing on major agency contracts
- net leverage progression and any one-time items inflating recent margins
- management guidance revisions and the mix shift toward higher-margin software/services
The dominant force on PSN right now is a broken-narrative event, not the macro tape. On July 29 the stock crashed 35% on a guidance cut and a surprise net loss, and the follow-through is ugly: multiple law firms have announced shareholder investigations, and the sell-side is reframing the story from steady-compounder to portfolio-in-reshaping with delivery delays and mixed demand. That is exactly the kind of crack that de-rates a low-intensity, durability-based narrative, because the whole reason the market paid up was reliability. Once reliability breaks, the story has nowhere to hide until a clean quarter arrives.
Verify before trusting this (4)
- Whether sell-side targets stabilize or keep getting cut over the next 2-3 weeks
- Any expansion or escalation of the shareholder investigations into a formal suit
- First clean contract-award or backlog datapoint that reframes the delays as timing not demand
- Whether defense-peer tape stays firm - if peers rally without PSN, the discount is truly idiosyncratic
This lens hasn't been run for this ticker yet.