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what it is
Parsons builds defense, cyber, and infrastructure systems for governments, split 51% Federal Solutions and 49% Critical Infrastructure.
how it gets paid
Last year Parsons made $6.4B in revenue. Critical infrastructure engineering was the main engine at $2.0B, or 31% of sales.
why growth slowed
Revenue fell 5.7% last year. At that time, news broke that the company had lost out on a $12.5 billion air traffic control contract with the faa.
what just happened
Parsons missed at $0.75 while the stock still leans on a $91 target.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
60/100 earnings predictability — reasonably predictable
20.0x trailing p/e — priced about right
14.0% return on capital — nothing to write home about
xvary composite: 60/100 — average
What they do
Parsons builds defense, cyber, and infrastructure systems for governments, split 51% Federal Solutions and 49% Critical Infrastructure.
Parsons has 21,000 employees. That is 21,000 people tied to clearances, contracts, and project delivery. Federal Solutions is 51% of revenue, while Critical Infrastructure is 49%. That split gives you two payers instead of one.
How they make money
$6.4B
annual revenue · their business grew -5.7% last year
Federal cybersecurity and intelligence
$1.7B
5.7%
Federal defense systems
$1.6B
5.7%
Critical infrastructure engineering
$2.0B
+10.0%
Critical infrastructure digital projects
$1.1B
+10.0%
The products that matter
defense and intelligence engineering
Federal Solutions
$3.8B · -8% growth
This is still the larger disclosed segment, which is why the decline matters so much. A 10.4% margin in 2025 says the work is profitable. The FAA loss says profitability alone does not keep growth intact.
10.4% margin
civil engineering and cyber work
Critical Infrastructure
$2.6B · +12% growth
This segment is carrying the story right now. At $2.6B and growing 12%, it is the cleanest proof that Parsons still has healthy demand somewhere. The catch is scale. It is not yet big enough to make Federal Solutions irrelevant.
faster grower
company-wide recovery plan
2026 execution plan
4.5% growth midpoint
Management guided to $6.5B–$6.8B in 2026 revenue with margin expansion. In human-speak: this is a prove-it year. You are not buying momentum. You are buying whether the reset sticks.
prove-it year
Key numbers
$3.75
fy2027 eps est
$9B
fy2029 rev est
20.0x
trailing p/e
n/a
dividend yield
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 55 / 100
- long-term debt $1.2B (15% of capital)
- net profit margin 6.7% — keeps 7 cents of every dollar in revenue
- return on equity 17% — $0.17 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in PSN 3 years ago → it's now worth $13,920.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Parsons missed at $0.75 while the stock still leans on a $91 target.
The last reported quarter showed $0.75 versus $0.83 expected, a -9.64% miss. Revenue was $4.8B in the filing, and the market still punished the print.
$4.8B
revenue
$0.75
eps
9.64%
surprise
the number that mattered
The -9.64% miss mattered because Parsons already trades at 20.0x earnings, so investors are paying for cleaner execution.
-
parsons corp.’s stock has been in a decline since early december.at that time, news broke that the company had lost out on a $12.5 billion air traffic control contract with the faa.
-
competitor peraton was awarded the modernization pact.
-
parsons was the favorite to land the deal due to its decades-long relationship with that agency.the change in provider highlighted the difficult environment being experienced by legacy government contractors, as the trump administration is choosing some new directions and shaking things up in the field. the loss dinged psn’s revenue growth prospects and the share price dropped on the day of disclosure.
-
the fourth-quarter 2025 earnings report was not well received by the investment community.
-
in midfebruary, december-period financials were released with revenue and earnings missing the mark.
source: company earnings report, 2026
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What could go wrong
the core risk is specific, not theoretical: Parsons has to prove the FAA loss was one miss, not a preview of weaker award competitiveness.
high
award replacement risk
The $12.5B FAA loss was not just a headline. It removed a major visible growth leg. If new wins do not show up, investors will keep assuming the revenue reset has further to go.
18% stock drop in 90 days
med
budget and procurement delays
Management flagged domestic budget uncertainty in 2026 guidance. In plain English: the work may exist, but the timing can still slip. Contractors feel that in revenue first and margin later.
2026 revenue guide: $6.5B–$6.8B
med
labor cost pressure
This is an 18,000-person business with a 6.7% net margin. That does not leave much room for wage pressure, hiring friction, or project staffing mistakes. A few points of slippage matter here.
18,000 employees · 6.7% net margin
med
segment mix keeps doing the wrong thing
Federal Solutions is still the larger disclosed segment at $3.8B, and it declined 8%. Critical Infrastructure is smaller at $2.6B, and it grew 12%. If that mix persists, the math stays frustrating even if one segment looks healthy.
$3.8B at -8% vs. $2.6B at +12%
What would change our mind: if 2026 revenue starts tracking below the $6.5B–$6.8B range, or if Federal Solutions keeps shrinking without enough offset from Critical Infrastructure, the "temporary setback" thesis breaks.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
Q1 2026 earnings on may 6, 2026
This is your first clean read on whether the post-FAA reset is stabilizing or spreading. One quarter will not fix the story. It can tell you whether management's first repair attempt is credible.
metric
2026 revenue midpoint: 4.5%
Management guided to $6.5B–$6.8B in revenue. If results start leaning below that range, the reset probably needs another reset.
segment trend
Federal Solutions vs. Critical Infrastructure
Watch whether the $2.6B segment growing 12% can offset the $3.8B segment shrinking 8%. Same company. Opposite directions. That's the whole model risk.
contract risk
new award flow after the FAA loss
Parsons does not need to replace $12.5B overnight. It does need to show that the pipeline still converts into meaningful wins. If that proof does not appear, you are left owning a slower contractor at 20.0x earnings.
Analyst rankings
earnings predictability
60 / 100
in human-speak: analysts think this is a serious business, but not one that prints the same quarter every time.
price stability
55 / 100
The stock is not chaos. It is very willing to punish contract surprises.
risk rank
3
Safer than a lot of smaller contractors. Still exposed enough that you cannot ignore execution.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 207 buyers vs. 153 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$52
$129
$63
current price
$91
target midpoint · +44% from current · 3-5yr high: $140 (+120% · 22% ann'l return)
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