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

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

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 Price Performance

Shares of NYSE PSN traded down $23.50 during mid-day trading on Wednesday, hitting $38.53. 7,635,081 shares of the company’s stock traded hands, compared to its average volume of 1,272,266. The company has a debt-to-equity ratio of 0.55, a current ratio of 1.75 and a quick ratio of 1.75. Parsons has a 1 year low of $36.26 and a 1 year high of $89.50. The company’s 50-day moving average is $55.67 and its two-hundred day moving average is $58.58. The company has a market capitalization of $4.12 billion, a P/E ratio of 18.31, a PEG ratio of 1.87 and a beta of 0.66.

Wall Street Analysts Forecast Growth

PSN has been the topic of several recent analyst reports. Jefferies Financial Group reiterated a “hold” rating on shares of Parsons in a research report on Wednesday, July 8th. Zacks Research upgraded shares of Parsons from a “strong sell” rating to a “hold” rating in a research report on Monday, April 13th. Citigroup raised their target price on shares of Parsons from $65.00 to $66.00 and gave the company a “buy” rating in a research note on Wednesday, July 1st. Barclays reduced their price target on shares of Parsons from $78.00 to $70.00 and set an “overweight” rating on the stock in a report on Tuesday, March 31st. Finally, William Blair reiterated an “outperform” rating on shares of Parsons in a research note on Wednesday. Nine analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus price target of $75.82.

Insider Buying and Selling

In related news, Director George L. Ball acquired 10,000 shares of the firm’s stock in a transaction on Wednesday, May 13th. The shares were acquired at an average cost of $50.00 per share, for a total transaction of $500,000.00. Following the completion of the transaction, the director directly owned 150,383 shares in the company, valued at approximately $7,519,150. This trade represents a 7.12% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Carey A. Smith acquired 12,500 shares of the stock in a transaction dated Friday, May 8th. The stock was bought at an average cost of $49.97 per share, with a total value of $624,625.00. Following the completion of the purchase, the chief executive officer directly owned 575,376 shares in the company, valued at approximately $28,751,538.72. The trade was a 2.22% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Over the last quarter, insiders purchased 32,500 shares of company stock worth $1,637,325. Corporate insiders own 1.31% of the company’s stock.

Hedge Funds Weigh In On Parsons

Large investors have recently modified their holdings of the stock. NewEdge Advisors LLC lifted its position in Parsons by 38.0% in the first quarter. NewEdge Advisors LLC now owns 959 shares of the company’s stock worth $57,000 after buying an additional 264 shares during the last quarter. Jones Financial Companies Lllp increased its position in Parsons by 433.9% during the first quarter. Jones Financial Companies Lllp now owns 1,260 shares of the company’s stock valued at $75,000 after acquiring an additional 1,024 shares during the last quarter. Sivia Capital Partners LLC purchased a new stake in shares of Parsons in the second quarter valued at $228,000. Prudential Financial Inc. raised its stake in shares of Parsons by 40.9% in the second quarter. Prudential Financial Inc. now owns 5,945 shares of the company’s stock valued at $427,000 after acquiring an additional 1,725 shares during the period. Finally, Northwestern Mutual Wealth Management Co. lifted its holdings in shares of Parsons by 176.0% in the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 828 shares of the company’s stock worth $59,000 after acquiring an additional 528 shares during the last quarter. Institutional investors own 98.02% of the company’s stock.

Parsons Company Profile

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.