Parsons Corporation (PSN) | Investment Case

1. Company Snapshot

1.a. Company Description

Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally.It operates through two segments, Federal Solutions and Critical Infrastructure.The company offers cyber security and intelligence services, as well as offensive and defensive cybersecurity platforms, tools, and operations to the U.S. Department of Defense and the United States intelligence community; space and geospatial solutions, such as geospatial intelligence, threat analytics, space situational awareness, small satellite launch and integration, satellite ground systems, fight dynamics, and command, and control solutions to the National Geospatial-Intelligence Agency, National Reconnaissance Office, and multiple units within the U.S. Department of Defense.

It also provides missile defense and C5ISR solutions, such as integrated air and missile defense, data fusion and analytics, platform system integration, directed energy, joint all-domain operations, and command and control systems to Defense Intelligence Agency and the U.S. Department of Defense; technology services for energy production systems, aviation, healthcare and bio-surveillance systems, and environmental systems and associated infrastructure, as well as nuclear waste processing and treatment, weapons of mass destruction elimination, program and project management, infectious disease control analytics, and data protection solutions.In addition, the company offers intelligent transportation system management, aviation, rail and transit systems, smart cities software, and critical infrastructure cyber protection to the transportation authorities, rail, and transit entities; engineering services for infrastructure; and program management, and environmental solutions to private-sector industrial clients and public utilities.Parsons Corporation was founded in 1944 and is headquartered in Centreville, Virginia.

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1.b. Last Insights on PSN

Parsons Corporation's recent performance was negatively impacted by weaker-than-expected quarterly earnings, with a miss on both earnings and revenue estimates. A confidential contract caused sales headwinds, leading investors to abandon the stock. Additionally, a decrease in stake by Citigroup Inc. and a "Moderate Buy" rating from brokerages, as reported by MarketBeat.com, may have contributed to the negative sentiment. However, recent developments include a $47 million classified contract extension and the appointment of a new Chief Human Resources Officer.

1.c. Company Highlights

Last Price	50.87
Change Percentage	0.91%
Open	50.83
Previous Close	50.41
Market Cap ( Millions)	5442
Volume	1674269
Year High	89.5
Year Low	49.38
M A 50	56.81
M A 200	71.18

FCF Yield	7.66%
Dividend Yield	0.00%
ROE	8.79%
Debt / Equity	63.29%
Net Debt / EBIDTA	267.47%
Price To Book	2.06
Price Earnings Ratio	23.93
Price To FCF	13.05
Price To sales	0.86
EV / EBITDA	13.12

2. Parsons Q1 2026: Record EBITDA, Backlog Surge

Parsons Corp. posted a 1% rise in adjusted EBITDA to $151 million, pushing the margin to a record 10.1%. Revenue climbed 8% YoY (3% organic), while EPS hit $0.79 versus analysts’ $0.70 estimate, underscoring disciplined cost management and robust contract execution (Carey Smith, Q1 2026 earnings call).

Publication Date: Apr -30

                                    📋 Highlights
                                    Record Adjusted EBITDA Margin::
                                                Reached 10.1%, a 50 bps increase from prior year, driven by Critical Infrastructure segment performance.
Major Contract Awards::
                                                Secured $593M FAA contract extension and $340M Middle East transportation project, totaling $933M in direct awards.
Total Backlog Growth::
                                                Achieved $9.3B total backlog (up 3% YoY), with $6.6B funded (71% of total), the highest since IPO.
Strategic Acquisition::
                                                Acquired Altamira Technologies for up to $375M to enhance national security capabilities in intelligence and defense tech.
2026 Guidance::
                                                Maintained growth outlook with $11B in awarded contracts unbooked, 8.5% Middle East revenue growth target, and 2-4 M&A deals expected.

                                

Revenue & Margin Surge

The company’s top line grew 8% to $X, reflecting a 3% organic lift and the impact of a $593 million FAA extension. Adjusted EBITDA margin expansion of 50 basis points to 10.1% marks a new quarterly high, driven by efficient project delivery and favorable mix.

Backlog Strengthens

Total backlog reached $9.3 billion, a 3% YoY increase, with funded backlog at $6.6 billion—71% of total and the highest ever. The $11 billion of awarded but unbooked contracts further underpins future revenue streams.

Contract Wins & M&A

Parsons secured four $100 million-plus contracts, including a $593 million FAA extension and a $340 million Middle‑East transportation project. The all‑cash acquisition of Altamira Technologies added $375 million in capabilities, reinforcing the company’s national‑security portfolio.

Federal & Critical Infrastructure Growth

Federal aviation revenue grew 25% in Q1, while the Critical Infrastructure segment delivered $79 million in adjusted EBITDA—an 8% rise and record margin of 10.8%. New UAS and cyber contracts in the Middle East are poised for accelerated procurement.

Guidance & Outlook

Parsons reiterated 2026 guidance, acknowledging a competitive labor market and budget uncertainty. The company anticipates 6.6% federal and 6.1% CI revenue growth, with a 1.5× book‑to‑bill ratio and continued M&A activity (2–4 deals) to support the 7.4% projected revenue growth next year.

Valuation Snapshot

At current earnings, the stock trades at a P/E of 23.59 and EV/EBITDA of 13.35, reflecting the market’s premium for its high backlog and resilient cash flow. The ROIC of 7.99% and ROE of 8.79% indicate efficient capital deployment in a growth‑oriented portfolio.

3. NewsRoom

Parsons Corporation (PSN) Q1 2026 Earnings Call Transcript

Apr -29

Source: seekingalpha.com

Parsons (PSN) Surpasses Q1 Earnings Estimates

Apr -29

Source: zacks.com

Parsons Reports First Quarter 2026 Results

Apr -29

Source: globenewswire.com

Parsons Marks Groundbreaking of SR 400 Express Lanes Project in Georgia

Apr -27

Source: globenewswire.com

Parsons (PSN) Projected to Post Earnings on Wednesday

Apr -27

Source: defenseworld.net

Cwm LLC Has $1.21 Million Stock Holdings in Parsons Corporation $PSN

Apr -27

Source: defenseworld.net

Parsons Demand Response Technology to Optimize and Enable Los Angeles Department of Water & Power's Operations and Strategic Plan

Apr -20

Source: globenewswire.com

3 Defense Tech Stocks Central to U.S. Battle Networks as Trump Ramps Up Spending on Iran and Beyond

Apr -17

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.63%)

6. Segments

Federal Solutions

Expected Growth: 6.5%

Parsons Corporation's Federal Solutions segment growth of 6.5% is driven by increasing demand for cybersecurity, intelligence, and defense services from government agencies. Additionally, the company's strategic acquisitions, investments in digital transformation, and strong order backlog contribute to its growth momentum.

Critical Infrastructure

Expected Growth: 6.8%

Parsons Corporation's Critical Infrastructure segment growth of 6.8% is driven by increasing government investments in infrastructure modernization, rising demand for cybersecurity and threat protection, and growing adoption of digital twin technologies. Additionally, the company's strategic acquisitions and partnerships have expanded its service offerings and strengthened its market position.

7. Detailed Products

Cybersecurity Solutions

Parsons Corporation provides cybersecurity solutions to protect critical infrastructure, networks, and systems from cyber threats.

Intelligent Transportation Systems (ITS)

Parsons designs and implements intelligent transportation systems to improve traffic flow, reduce congestion, and enhance safety.

Environmental Remediation Services

Parsons provides environmental remediation services to clean up contaminated sites, restore ecosystems, and promote sustainable development.

Infrastructure Engineering and Construction

Parsons designs, builds, and maintains critical infrastructure, including roads, bridges, airports, and buildings.

Geospatial and Data Analytics

Parsons provides geospatial and data analytics services to help clients make informed decisions, optimize operations, and improve performance.

Defense and Security Solutions

Parsons provides defense and security solutions to protect people, infrastructure, and assets from threats.

8. Parsons Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Parsons Corporation is moderate, as there are some alternative products and services available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Parsons Corporation is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Parsons Corporation is moderate, as the company relies on a few key suppliers, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for Parsons Corporation is high, as the industry has low barriers to entry and new companies can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry for Parsons Corporation is high, as the industry is highly competitive and companies are constantly competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	28.84%
Debt Cost	4.31%
Equity Weight	71.16%
Equity Cost	8.22%
WACC	7.09%
Leverage	40.54%

11. Quality Control: Parsons Corporation passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Mueller Water Products

A-Score: 5.4/10

Value: 4.0

Growth: 6.9

Quality: 7.3

Yield: 2.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

Gates Industrial

A-Score: 4.9/10

Value: 5.5

Growth: 4.7

Quality: 6.6

Yield: 0.0

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

SPX Technologies

A-Score: 4.8/10

Value: 1.7

Growth: 6.0

Quality: 7.0

Yield: 0.0

Momentum: 8.0

Volatility: 6.0

1-Year Total Return ->

EnPro

A-Score: 4.7/10

Value: 2.6

Growth: 4.6

Quality: 6.1

Yield: 2.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

Parsons

A-Score: 4.5/10

Value: 5.6

Growth: 6.8

Quality: 5.7

Yield: 0.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

Middleby

A-Score: 3.8/10

Value: 5.0

Growth: 6.1

Quality: 2.8

Yield: 0.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.65%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.09%

Parsons Corporation - US70202L1026

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PSN

1.c. Company Highlights

Strong Momentum

Expensive

Less Volatile

Earnings Beats

Revenues Beats

Medium Volatility

Average Growth

Average Yield

Fairly Valued

Stable Momentum

Earnings Miss

Weak Momentum

Average Quality

Revenues Miss

2. Parsons Q1 2026: Record EBITDA, Backlog Surge

Revenue & Margin Surge

Backlog Strengthens

Contract Wins & M&A

Federal & Critical Infrastructure Growth

Guidance & Outlook

Valuation Snapshot

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.63%)

6. Segments

Federal Solutions

Expected Growth: 6.5%

Critical Infrastructure

Expected Growth: 6.8%

7. Detailed Products

Cybersecurity Solutions

Intelligent Transportation Systems (ITS)

Environmental Remediation Services

Infrastructure Engineering and Construction

Geospatial and Data Analytics

Defense and Security Solutions

8. Parsons Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Parsons Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

50.87$

Current Price

50.87$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA