PSN Stock Risk & Deep Value Analysis
Parsons Corp
Technology • Information Technology Services
DVR Score
out of 10
What You Need to Know About PSN Stock
We analyzed Parsons Corp using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran PSN through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
PSN Risk Analysis & Red Flags
What Could Go Wrong
Continued deceleration in organic revenue growth, exacerbated by federal book-to-bill weakness and heightened geopolitical risks in the Middle East, could lead to sustained margin pressure and potential downward revisions to earnings estimates, further limiting stock price appreciation.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Medium
Red Flags
- ⚠
TTM revenue down 5.7% YoY through the latest reported period.
- ⚠
Analyst downgrades (Baird, KeyBanc) citing slowing growth and Middle East revenue exposure risks.
- ⚠
Debt-to-equity ratio has increased from 31.7% to 44.7% over 5 years.
Upcoming Risk Events
- 📅
Q1 2026 earnings miss or weak forward guidance
- 📅
Further deterioration of federal book-to-bill ratio
- 📅
Geopolitical instability impacting Middle East revenue (18% of total revenue)
When to Reconsider
- 🚪
Exit if Q1 2026 earnings report shows continued revenue decline and significant margin compression.
- 🚪
Sell if total debt-to-equity ratio exceeds 60% without corresponding high-ROI asset acquisition.
- 🚪
Exit if the stock breaks below $48 and fails to recover within two trading sessions.
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What Does Parsons Corp (PSN) Do?
Market Cap
$5.99B
Sector
Technology
Industry
Information Technology Services
Employees
20,000
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 Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment offers critical technologies, such as cyber; missile defense; intelligence; electronic warfare; space ground systems; space and weapon system resiliency; geospatial and signals intelligence; environmental remediation; border security and critical infrastructure protection; counter unmanned air systems; and biometrics and bio surveillance solutions to the U.S. government and its agencies. This segment also provides software and hardware; satellite ground systems support and operations, flight dynamics, data fusion and analytics, platform system integration, directed energy, and command and control systems; digital landscape and mission support; and weapons of mass destruction elimination and munition destruction, architectural design, program and construction management, infectious disease control, and advanced electronic security systems, as well as remediation of unexploded ordinances and hazardous, toxic, and reactive wastes. Its Critical Infrastructure segment develops solutions for aviation, rail and transit, bridges, roads, and highways. This segment also provides technical solutions, project conceptualization, urban planning, landscape architecture, sewage treatment and drainage, and events management; AI/ML, cloud, digital twins, systems integration, transportation network software, vehicle inspection data analytics software, automated people mover, electric vehicle infrastructure, and autonomous vehicle integration services; and planning, engineering, and management services for infrastructure, including bridges and tunnels, roads and highways, and water and wastewater. Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.
Visit Parsons Corp WebsiteInvestment Thesis
Parsons Corporation offers a stable investment in essential government services and critical infrastructure, supported by strong government relationships, a robust backlog, and strategic investments in advanced technologies like AI and cybersecurity. While its core business is unlikely to deliver 10x growth, it offers defensive characteristics and consistent profitability within a crucial sector, with potential for incremental gains from ongoing infrastructure and defense spending.
Is PSN Stock Undervalued?
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PSN Price Targets & Strategy
12-Month Target
$75.00
Bull Case
$95.00
Bear Case
$60.00
Valuation Basis
Based on 28x forward P/E applied to an estimated FY26 EPS of $2.68, reflecting a stable growth outlook with some premium for defense/tech exposure.
Entry Strategy
Consider dollar-cost averaging between $50-$55, targeting dips towards recent support levels. A break below $50 would warrant re-evaluation.
Exit Strategy
Take profit at $75-$80 for a 12-month horizon; consider stop-loss at $48 to protect against further downside if growth concerns persist.
Portfolio Allocation
3-5% for moderate risk tolerance, reflecting its stability but limited upside potential for hyper-growth.
Price Targets & Strategy
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Is PSN Financially Healthy?
Valuation
P/E Ratio
24.85
Profitability
Gross Margin
22.49%
Operating Margin
6.57%
Net Margin
3.79%
Return on Equity
9.48%
Revenue Growth
-5.72%
EPS
$2.20
Balance Sheet
Current Ratio
1.75
Quick Ratio
1.64
Debt/Equity
0.47
Total Debt
$1.24B
Cash & Equivalents
$466.39M
Cash Flow
Free Cash Flow
$424.30M
Other
Beta (Volatility)
0.71
Does PSN Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable
Moat Sources
3 Identified
The moat is durable due to the high barriers to entry in government contracting (e.g., security clearances, specialized expertise, long sales cycles, regulatory compliance), the critical nature of its services, and its embeddedness within government programs. Its proprietary technology further enhances this.
Moat Erosion Risks
- •Government budget cuts or shifts in strategic priorities
- •Increased competitive intensity from larger or more agile defense contractors
- •Rapid technological changes that could render some existing IP less relevant
PSN Competitive Moat Analysis
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PSN Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (Government contractors typically have lower retail social media engagement unless major news breaks.)
Institutional Sentiment
Negative (Baird downgraded to Neutral with a $60 target; KeyBanc downgraded to Sector Weight, both citing growth concerns and Middle East risks).
Insider Activity (Form 4)
No specific Form 4 filings reported for CEO/CFO in the last 90 days. Total institutional ownership % unavailable.
Options Flow
Normal options activity (No specific unusual put/call ratio data or significant block trades flagged in the provided intelligence).
Earnings Intelligence
Next Earnings
2026-04-29
Surprise Probability
Medium
Historical Earnings Pattern
Parsons' stock price reaction to past earnings has been mixed, often driven more by future guidance and large contract announcements than by immediate quarterly results for this stable, project-based business.
Key Metrics to Watch
Competitive Position
Top Competitor
Leidos Holdings Inc. (LDOS)
Market Share Trend
Stable to slightly gaining in specific high-growth niches (e.g., V2X, cyber defense) through continuous contract wins, despite overall TTM revenue decline.
Valuation vs Peers
Parsons tends to trade at a slight premium to some generalist government services peers due to its advanced technology focus (cyber, AI, space) but may trade at a discount to faster-growing tech firms. Recent growth deceleration could pressure its multiple.
Competitive Advantages
- •Deep, long-standing relationships with U.S. government and defense agencies
- •Specialized intellectual property and expertise in critical technologies (AI, cybersecurity, space)
- •Proven ability to manage large, complex infrastructure and defense projects globally
Market Intelligence
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What Could Drive PSN Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings Report (April 29, 2026)
- •Potential new government contract awards (e.g., federal cyber defense intent-to-award)
Medium-Term (6-18 months)
- •Expansion of advanced technology solutions (AI, cyber) into new government/commercial programs
- •Successful integration and scaling of recently won infrastructure projects
Long-Term (18+ months)
- •Sustained increase in government spending on critical infrastructure and defense modernization
- •Leveraging iNET platform for broader smart infrastructure adoption
Catalysts & Growth Drivers
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What's the Bull Case for PSN?
- ✓
Sustained acceleration in organic revenue growth above 5% annually.
- ✓
Consistent expansion of operating margins and free cash flow.
- ✓
Significant new contract wins in high-margin advanced technology segments.
Bull Case Analysis
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Competing with PSN
See how Parsons Corp compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Parsons Corp PSN | $6.0B | 1.8 | 24.9 | $6.4B | 3.8% | -5.7% | |
Apple Inc AAPL | $3.9T | 1.5 | 33.2 | $391.0B | 27.0% | 10.1% | Compare → |
Alphabet Inc GOOGL | $4.7T | 1.0 | 29.1 | $402.8B | 37.9% | 17.4% | Compare → |
Meta Platforms Inc META | — | 5.1 | 15.7 | — | 30.1% | 22.2% | Compare → |
Microsoft Corp MSFT | — | 0.5 | — | — | — | — | Compare → |
NVIDIA Corp NVDA | $4.4T | 5.3 | 38.5 | $215.9B | 55.6% | 65.0% | Compare → |
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How Parsons Corp Makes Money
Parsons Corporation operates as a global provider of technology-driven solutions and services for federal, defense, intelligence, and critical infrastructure markets. The company generates revenue primarily through long-term contracts where it acts as a prime contractor or project manager. These contracts involve delivering a range of services from engineering and design to cybersecurity, intelligence support, and advanced infrastructure solutions for clients like the U.S. Department of Defense, various federal agencies, and state/local governments. Its business model thrives on deep domain expertise, strong client relationships, and the ability to execute complex projects requiring specialized technical capabilities.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Parsons Corp (PSN)?
As of April 15, 2026, Parsons Corp has a DVR Score of 1.8 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Parsons Corp?
Parsons Corp's market capitalization is approximately $6.0B. The company operates in the Technology sector within the Information Technology Services industry.
What ticker symbol does Parsons Corp use?
PSN is the ticker symbol for Parsons Corp. The company trades on the NYQ.
What is the risk level for PSN stock?
Our analysis rates Parsons Corp's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of PSN?
Parsons Corp currently has a price-to-earnings (P/E) ratio of 24.9. This is in line with broader market averages.
Is Parsons Corp's revenue growing?
Parsons Corp has reported revenue growth of -5.7%. Revenue has been declining, which warrants closer examination.
Is PSN stock profitable?
Parsons Corp has a profit margin of 3.8%. The company is profitable but margins are modest.
How often is the PSN DVR analysis updated?
Our AI-powered analysis of Parsons Corp is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 15, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for PSN (Parsons Corp) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.