Parsons Corporation Reports Q4 Earnings Miss Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 8 hours ago
0mins
Should l Buy PSN?
Source: seekingalpha
Parsons Corporation's stock fell 11.65% as it hit a 20-day low amid disappointing earnings results.
The company reported a Q4 Non-GAAP EPS of $0.75, missing expectations by $0.04, and a revenue of $1.6 billion, which was a 7.5% year-over-year decline, indicating weak market demand that could pose challenges for future performance. Despite achieving a net income of $56 million, a 3% increase year-over-year, the overall performance raised concerns among investors.
The decline in revenue, coupled with the earnings miss, may affect investor confidence and the company's ability to navigate future uncertainties, despite strong cash flow management.
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Analyst Views on PSN
Wall Street analysts forecast PSN stock price to rise
14 Analyst Rating
10 Buy
4 Hold
0 Sell
Moderate Buy
Current: 63.720
Low
70.00
Averages
84.00
High
107.00
Current: 63.720
Low
70.00
Averages
84.00
High
107.00
About PSN
Parsons Corporation is a disruptive technology provider in the national security and global infrastructure markets, with capabilities across cyber and electronic warfare, space and missile defense, transportation, water and environment, urban development, and critical infrastructure protection. Its Federal Solutions segment provides advanced technical solutions to the United States government. This segment provides advanced technologies, supporting national security missions in cyber operations, missile defense, and military facility modernization, logistics support, hazardous material remediation and engineering services. Its Critical Infrastructure segment offers integrated engineering and management services for complex physical and digital infrastructure around the globe. This segment is a technology innovator focused on next-generation digital systems and complex structures. It also develops advanced, warfighter-focused solutions for military and security applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Support for Technological Innovation: This contract will facilitate the production of SealingTech's Joint Cyber Hunt Kit (JCHK) solution, aimed at enhancing the operational readiness and superiority of the U.S. military, showcasing the company's technological prowess in the defense and intelligence sectors.
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See More
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- Fiscal 2026 Forecast: The company projects fiscal 2026 revenue between $6.5 billion and $6.8 billion, with core profit expected to range from $615 million to $675 million, resetting expectations for investors and providing a clearer outlook.
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See More
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See More
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See More
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- Earnings Miss: Parsons' Q4 report revealed adjusted earnings per share of $0.75 and sales of $1.6 billion, both falling short of Wall Street expectations, resulting in a 14.4% drop in stock price, indicating investor disappointment with the company's performance.
- Revenue Decline: Overall revenue decreased by 8% year-over-year, with organic revenue down 10%, although growth was noted in space and defense services, transportation, and critical infrastructure protection; however, a decline in sales volume from a key confidential contract negatively impacted overall results.
- Cautious Outlook: Parsons anticipates a return to growth in 2026, targeting sales between $6.5 billion and $6.8 billion, which would represent a 4.5% annual revenue increase if the midpoint is achieved, yet investors express concerns over potential adverse effects from shifts in confidential contracts.
- Market Reaction: Following the earnings report, Parsons experienced significant stock volatility, with a current market cap of $7.5 billion and a trading volume of 4.7 million shares, reflecting heightened investor scrutiny and anxiety regarding the company's future prospects.
See More
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- Significant Revenue Growth: Parsons Corporation reported a 12% total revenue growth and an 8% organic revenue growth in Q4 2025, with adjusted EBITDA margin expanding to a record 9.6%, indicating strong market demand and effective business execution.
- Outstanding Cash Flow Performance: The company achieved a 100% free cash flow conversion for fiscal year 2025, exceeding the high end of its cash flow guidance range, reflecting a healthy financial position that supports future investments and acquisitions.
- Strategic Contract Wins: In Q4, Parsons secured several key contracts, including a $392 million ten-year federal customer contract, showcasing its strong competitiveness in critical infrastructure and defense sectors, which is expected to drive future revenue growth.
- Acquisitions and Expansion: The company acquired Applied Sciences Consulting and Altamira Technologies, enhancing its capabilities in national security and intelligence, indicating Parsons' strategic decisions in technology and market expansion aimed at boosting long-term growth potential.
See More
