Parsons (NYSE:PSN) Announces Earnings Results, Misses Expectations By $0.82 EPS

Parsons (NYSE:PSN) posted its earnings results on Wednesday. The company reported ($0.06) earnings per share for the quarter, missing analysts’ consensus estimates of $0.76 by ($0.82), FiscalAI reports. Parsons had a net margin of 3.62% and a return on equity of 11.52%. The firm had revenue of $1.59 billion during the quarter, compared to the consensus estimate of $1.61 billion. During the same period in the prior year, the company posted $0.78 EPS. The firm’s revenue was down .5% compared to the same quarter last year.

Here are the key takeaways from Parsons’ conference call:

• 2026 guidance was reduced: Revenue guidance fell by $300 million at the midpoint to $6.2 billion–$6.5 billion, while adjusted EBITDA guidance was reduced by $115 million to $500 million–$560 million. The changes reflect $118 million of charges, slower infrastructure ramp-up, and federal contract funding and award delays.
• Underlying bookings and backlog remained strong. Second-quarter awards rose 24% year over year to $1.9 billion, producing a 1.2x book-to-bill ratio, while backlog reached $9.3 billion, including $6.6 billion funded. Federal Solutions bookings increased 51% and Critical Infrastructure achieved its 23rd consecutive quarter with book-to-bill at or above 1.0x.
• Normalized profitability improved, led by Critical Infrastructure. Normalized adjusted EBITDA rose 8% to $161 million, with margin expanding 70 basis points to 10.1%; Critical Infrastructure margin increased 140 basis points to 11.9%, supported by favorable mix, Middle East growth, and accretive acquisitions.
• Parsons is reshaping its portfolio by divesting two lower-margin advisory contracts and exiting two difficult remote programs, while absorbing a $41 million joint-venture charge following historic weather-related disruption. Management expects these actions to improve long-term margins and reduce risk, but the remote-contract divestiture remains subject to approval and is expected to close in the third quarter.
• Technology-led federal demand remains a key growth driver. The company won major missile defense, cyber, space, and Navy awards, with four of its five quarterly contracts exceeding $100 million incorporating artificial intelligence; management expects federal margins to expand to 9.4% in the second half as product sales and accretive contracts ramp.

Parsons Stock Performance

Shares of NYSE PSN traded down $23.50 during trading on Wednesday, hitting $38.53. The company had a trading volume of 7,635,081 shares, compared to its average volume of 1,272,266. The stock has a 50 day simple moving average of $55.67 and a 200 day simple moving average of $58.58. The company has a debt-to-equity ratio of 0.55, a quick ratio of 1.75 and a current ratio of 1.75. Parsons has a 12 month low of $36.26 and a 12 month high of $89.50. The firm has a market capitalization of $4.12 billion, a P/E ratio of 18.31, a price-to-earnings-growth ratio of 1.87 and a beta of 0.66.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on PSN shares. Jefferies Financial Group restated a “hold” rating on shares of Parsons in a research note on Wednesday, July 8th. Citigroup increased their price objective on shares of Parsons from $65.00 to $66.00 and gave the stock a “buy” rating in a research note on Wednesday, July 1st. BNP Paribas Exane set a $65.00 price objective on shares of Parsons and gave the stock an “outperform” rating in a report on Wednesday, May 27th. Zacks Research upgraded shares of Parsons from a “strong sell” rating to a “hold” rating in a research report on Monday, April 13th. Finally, Truist Financial reduced their target price on shares of Parsons from $85.00 to $75.00 and set a “buy” rating for the company in a report on Monday, April 20th. Nine investment analysts have rated the stock with a Buy rating and six have given a Hold rating to the company. Based on data from MarketBeat.com, Parsons currently has a consensus rating of “Moderate Buy” and a consensus target price of $75.82.

Insider Activity at Parsons

In other news, Director George L. Ball bought 10,000 shares of the firm’s stock in a transaction on Wednesday, May 13th. The shares were bought at an average price of $50.00 per share, for a total transaction of $500,000.00. Following the purchase, the director owned 150,383 shares in the company, valued at approximately $7,519,150. The trade was a 7.12% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Mark Keith Holdsworth bought 10,000 shares of the firm’s stock in a transaction on Tuesday, May 12th. The shares were purchased at an average price of $51.27 per share, for a total transaction of $512,700.00. Following the purchase, the director owned 39,918 shares in the company, valued at $2,046,595.86. This trade represents a 33.42% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last ninety days, insiders purchased 32,500 shares of company stock worth $1,637,325. 1.31% of the stock is owned by company insiders.

Hedge Funds Weigh In On Parsons

A number of hedge funds have recently modified their holdings of the company. Alberta Investment Management Corp purchased a new position in shares of Parsons during the 4th quarter valued at $1,001,000. EP Wealth Advisors LLC purchased a new stake in Parsons in the 4th quarter worth $650,000. Empowered Funds LLC purchased a new stake in Parsons in the 4th quarter worth $469,000. XTX Topco Ltd bought a new stake in Parsons during the fourth quarter valued at about $2,273,000. Finally, VARCOV Co. bought a new stake in Parsons during the fourth quarter valued at about $246,000. 98.02% of the stock is currently owned by institutional investors.

About Parsons

Parsons Corporation (NYSE: PSN) is a technology-driven engineering, construction, technical and professional services firm. The company delivers end-to-end solutions that span feasibility studies, design and engineering, construction management, system integration and ongoing operations support. Parsons serves both government and commercial clients and focuses on critical infrastructure, defense, security, intelligence and environmental programs.

Core services include program and construction management for transportation systems, water and environmental infrastructure, cybersecurity and advanced systems integration.