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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 driven by strong Q3 earnings, beating estimates with $0.86 per share, compared to $0.72 per share expected. The company's revenue reached $1.6 billion, despite a 10% year-over-year decrease, and a 14% organic decline. Excluding a confidential contract, revenue grew 14%, and 9% organically. A significant backlog of $8.8 billion, with 72% funded, provides visibility. Management raised 2025 guidance for revenue, adjusted EBITDA, and cash flow. Sequoia Financial Advisors LLC increased its stake by 12.2%. (Source: Q3 2025 Earnings Report, Sequoia Financial Advisors LLC)

1.c. Company Highlights

2. Parsons Corporation's Q3 2025 Earnings: Strong Performance and Growth Outlook

Parsons Corporation reported a robust third quarter in 2025, with total revenue growing 14% and organic revenue increasing 9%, excluding a confidential contract. The company's adjusted EBITDA margin expanded 60 basis points to 9.8%, driven by excellent program execution and new bids with higher margins. Earnings per share (EPS) came in at $0.86, beating estimates of $0.72. The company's cash flow from operations was $163 million, and the book-to-bill ratio stood at 1.0x for the quarter and trailing 12 months.

Publication Date: Nov -10

📋 Highlights
  • Strong Financial Performance:: Adjusted EBITDA margin expanded 60 basis points to 9.8%, with cash flow from operations reaching $163 million.
  • Revenue Growth:: Total revenue grew 14% YoY, driven by 18% growth in Critical Infrastructure and 9% organic growth in Federal Solutions.
  • 2025 Guidance Update:: Revenue outlook revised to $6.4–$6.5 billion (14–10% organic growth), with adjusted EBITDA expected at $600–$630 million (9.5% margin).
  • Strategic Acquisitions & Contracts:: Acquired Applied Sciences Consulting and secured $133 million Georgia State Route 400 project, plus a 10-year Holston Army contract.
  • Future Growth Drivers:: $25 billion allocated for border security and $12 billion for Pacific Deterrence, with FAA modernization funding expected to drive 25–30% contract growth in 2025.

Segment Performance

The Critical Infrastructure segment saw revenue growth of 18%, driven by organic growth and acquisitions, while the Federal Solutions segment grew 9% organically. The company won four contracts worth over $100 million in the quarter, including a 10-year single-award task order contract for the Holston Army ammunition plant. The acquisition of Applied Sciences Consulting, a Florida-based engineering firm, is expected to enhance the company's capabilities in water and environment, a rapidly growing area within critical infrastructure.

Guidance and Outlook

Parsons reiterated its 2025 adjusted EBITDA and cash flow guidance ranges but modified its revenue outlook to reflect delays in sole-source task order awards and product procurements. The company expects total revenue to be between $6.4 billion and $6.5 billion, representing total revenue growth of 14% and 10% on an organic basis, excluding the confidential contract. Analysts estimate next year's revenue growth at 5.4%.

Valuation

With a P/E Ratio of 23.3 and EV/EBITDA of 13.92, the company's valuation appears to be reasonable, considering its strong growth prospects. The company's Return on Equity (ROE) stands at 16.28%, indicating a good return for shareholders. The Net Debt / EBITDA ratio is 1.44, suggesting a manageable debt burden.

Growth Drivers

The company has several growth drivers, including border security, Pacific Deterrence, and federal funding. The FAA modernization opportunity is also expected to contribute to growth, with an award imminent and $12.5 billion in funding available. The company's strong pipeline of opportunities, including a potential $10 billion in awards in the Middle East, is expected to drive mid-single-digit growth in the Federal Solutions segment going into next year.

3. NewsRoom

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Parsons Corporation (PSN) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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Parsons to Present at Goldman Sachs Industrials and Materials Conference

Nov -25

Source: globenewswire.com

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Zephyr Releases PSN Top Guns List for Q3 2025, Highlighting Best-In-Class Separate Accounts, Managed Accounts and Managed ETF Strategies

Nov -21

Source: prnewswire.com

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Artisan Global Discovery Fund: Q3 Delivers Strong Results Amid Trimming And Exits

Nov -20

Source: seekingalpha.com

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Parsons Awarded Position On $15 Billion Pacific Deterrence Initiative Infrastructure Contract

Nov -11

Source: globenewswire.com

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Parsons Awarded Contract to Modernize U.S. Coast Guard Biometrics System

Nov -10

Source: globenewswire.com

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Parsons Corporation (PSN) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Parsons (PSN) Q3 Earnings Top Estimates

Nov -05

Source: zacks.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

Strength

Weaknesses

Opportunities

Threats

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

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Mueller Water Products

A-Score: 5.3/10

Value: 3.1

Growth: 6.2

Quality: 6.8

Yield: 2.0

Momentum: 6.5

Volatility: 7.0

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EnPro

A-Score: 4.8/10

Value: 1.8

Growth: 4.6

Quality: 6.3

Yield: 1.0

Momentum: 8.5

Volatility: 6.7

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Middleby

A-Score: 4.7/10

Value: 6.0

Growth: 6.1

Quality: 6.1

Yield: 0.0

Momentum: 4.5

Volatility: 5.7

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Gates Industrial

A-Score: 4.7/10

Value: 3.4

Growth: 4.7

Quality: 5.2

Yield: 0.0

Momentum: 8.5

Volatility: 6.3

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SPX Technologies

A-Score: 4.3/10

Value: 1.4

Growth: 6.0

Quality: 6.2

Yield: 0.0

Momentum: 6.0

Volatility: 6.0

1-Year Total Return ->

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Parsons

A-Score: 4.2/10

Value: 4.1

Growth: 6.8

Quality: 5.8

Yield: 0.0

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

66.37$

Current Price

66.38$

Potential

-0.00%

Expected Cash-Flows