Head-To-Head Review: Parsons (NYSE:PSN) and ADTRAN (NASDAQ:ADTN)

ADTRAN (NASDAQ:ADTN) and Parsons (NYSE:PSN) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Insider & Institutional Ownership

80.6% of ADTRAN shares are held by institutional investors. Comparatively, 98.0% of Parsons shares are held by institutional investors. 2.2% of ADTRAN shares are held by company insiders. Comparatively, 1.3% of Parsons shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares ADTRAN and Parsons’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADTRAN	-3.18%	10.94%	1.35%
Parsons	3.62%	11.52%	5.36%

Risk & Volatility

ADTRAN has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Parsons has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Valuation and Earnings

This table compares ADTRAN and Parsons”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ADTRAN	$1.08 billion	1.02	-$45.66 million	($0.39)	-34.97
Parsons	$6.36 billion	0.89	$241.14 million	$2.09	25.38

Parsons has higher revenue and earnings than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than Parsons, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for ADTRAN and Parsons, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADTRAN	1	2	4	0	2.43
Parsons	0	6	9	0	2.60

ADTRAN currently has a consensus target price of $18.00, suggesting a potential upside of 31.96%. Parsons has a consensus target price of $77.00, suggesting a potential upside of 45.14%. Given Parsons’ stronger consensus rating and higher probable upside, analysts plainly believe Parsons is more favorable than ADTRAN.

Summary

Parsons beats ADTRAN on 11 of the 14 factors compared between the two stocks.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.

About Parsons

Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. The company operates through Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment provides critical technologies, such as cybersecurity; missile defense; intelligence; space launch and ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and bio surveillance solutions to U.S. Department of Defense, including military services; Missile Defense Agency, the Department of Energy; the Department of State; the Department of Homeland Security, and the Federal Aviation Administration. The Critical Infrastructure segment provides management, design, and engineering services, as well as offers leveraging sensor solutions. This segment develops digital solutions for next generation aviation, rail and transit, bridges, roads, and highways; and provides water and wastewater treatment systems; AI/ML, and digital twin and cyber systems integration services; planning, engineering, and management services for infrastructure, including bridges and tunnels, roads and highways, water and wastewater, and dams and reservoirs. Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.