| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 55.37 | -21 |
| Intrinsic value (DCF) | 25.16 | -64 |
| Graham-Dodd Method | 14.20 | -80 |
| Graham Formula | 68.75 | -2 |
Parsons Corporation (NYSE: PSN) is a leading provider of integrated defense, intelligence, and critical infrastructure solutions, serving government and commercial clients globally. Founded in 1944 and headquartered in Centreville, Virginia, Parsons operates through two key segments: Federal Solutions and Critical Infrastructure. The company specializes in cybersecurity, geospatial intelligence, missile defense, and C5ISR (Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance) solutions, primarily catering to the U.S. Department of Defense and intelligence agencies. Additionally, Parsons delivers smart city technologies, intelligent transportation systems, and environmental infrastructure solutions, positioning itself at the intersection of national security and technological innovation. With a strong presence in North America and the Middle East, Parsons leverages its engineering expertise and cybersecurity capabilities to address evolving threats in defense and critical infrastructure. The company’s diversified portfolio and government contracts provide stability, while its focus on high-growth areas like space situational awareness and directed energy systems offers long-term upside.
Parsons Corporation presents a compelling investment case due to its strong positioning in high-margin government contracts, particularly in cybersecurity and defense technology. The company’s stable revenue base, driven by long-term federal contracts, mitigates economic cyclicality risks. However, reliance on U.S. government spending introduces budgetary dependency, while competition in defense IT services remains intense. With a market cap of ~$7.1B, a beta of 0.57 (indicating lower volatility than the market), and no dividend payout, Parsons appeals to growth-oriented investors. Its diluted EPS of $2.14 and operating cash flow of $523.6M (FY 2024) reflect efficient operations, though debt levels ($1.42B) warrant monitoring. The stock is well-suited for investors seeking exposure to defense tech and infrastructure modernization trends.
Parsons competes in the defense and infrastructure services sector by differentiating through its integrated cybersecurity and geospatial intelligence capabilities. Unlike pure-play IT services firms, Parsons combines engineering expertise with advanced technology solutions, particularly in C5ISR and missile defense, giving it an edge in complex, multi-domain projects. Its focus on offensive and defensive cyber operations aligns with growing government demand for threat resilience. However, the company faces stiff competition from larger defense primes (e.g., Lockheed Martin) with broader resources and smaller agile firms specializing in niche IT solutions. Parsons’ Critical Infrastructure segment competes with engineering and transportation-focused firms, where its smart cities software and rail transit systems stand out. The lack of a dividend may deter income-focused investors, but its recurring revenue from classified contracts provides stability. Key risks include contract concentration and slower-than-expected federal budget growth for defense IT.