Parsons Corp. Faces Uncertainty Amid FAA Loss and Contract Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Fool
- FAA Contract Loss: Parsons Corp. lost a heavily promoted $12.5 billion FAA contract bid, resulting in a nearly 40% stock price decline over the past six months, including a 21% drop in December, significantly impacting market confidence in the company.
- Profitability Improvement: Despite declining revenue expectations, Parsons achieved record profitability in Q1, with adjusted EBITDA margins rising to 10.8%, demonstrating the company's ability to maintain profit growth in a challenging environment.
- Record Backlog: The company's backlog reached a new high of $9.3 billion, primarily driven by projects tied to the U.S. Infrastructure Investment and Jobs Act and large-scale initiatives in the Middle East, providing strong support for future revenue growth.
- Cash Flow Pressure: While profitability is improving, the company's working capital is under strain, with net days' sales outstanding increasing from 58 to 72 days, as management cites collection delays in the Middle East and the impact of the shrinking confidential contract, adding uncertainty to future cash flows.
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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: 51.810
Low
70.00
Averages
84.00
High
107.00
Current: 51.810
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.
Parsons Corp. Faces Uncertainty Amid FAA Loss and Contract Challenges
- FAA Contract Loss: Parsons Corp. lost a heavily promoted $12.5 billion FAA contract bid, resulting in a nearly 40% stock price decline over the past six months, including a 21% drop in December, significantly impacting market confidence in the company.
- Profitability Improvement: Despite declining revenue expectations, Parsons achieved record profitability in Q1, with adjusted EBITDA margins rising to 10.8%, demonstrating the company's ability to maintain profit growth in a challenging environment.
- Record Backlog: The company's backlog reached a new high of $9.3 billion, primarily driven by projects tied to the U.S. Infrastructure Investment and Jobs Act and large-scale initiatives in the Middle East, providing strong support for future revenue growth.
- Cash Flow Pressure: While profitability is improving, the company's working capital is under strain, with net days' sales outstanding increasing from 58 to 72 days, as management cites collection delays in the Middle East and the impact of the shrinking confidential contract, adding uncertainty to future cash flows.
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Los Angeles D Line Subway Extension Project Launched
- Project Launch: The Los Angeles County Transportation Authority has officially opened Section 1 of the D Line Subway Extension, which aims to extend approximately nine miles under Wilshire Boulevard to enhance urban transit efficiency.
- Design and Construction: Section 1 includes the construction of 3.9 miles of subway connecting the current terminus at Wilshire/Western in Los Angeles to Beverly Hills, featuring three new underground stations at La Brea, Fairfax, and La Cienega.
- Community Impact: This project will improve commuter access for nearby neighborhoods and enhance accessibility to cultural and art institutions, significantly elevating the quality of life for residents.
- Sustainable Development: The D Line extension will provide safe and sustainable transit solutions that reduce traffic congestion and improve air quality, facilitating smoother commutes between Los Angeles and Beverly Hills.
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Parsons' Unique AI Investment Edge in Defense Sector
- Contract Extensions and New Opportunities: In March 2026, Parsons announced a $47 million classified contract extension, having served an unnamed U.S. government client for over six years, demonstrating its stability and trust in the defense sector.
- Key Project Developments: Two months later, Parsons secured a $136 million Air Force architect-engineer contract covering infrastructure and cybersecurity design services at an Air Force base, further solidifying its position in the defense infrastructure market.
- Financial Performance Analysis: In Q1 2026, Parsons reported revenue of $1.5 billion, a 4% year-over-year decline, but excluding a large fixed-price contract, revenue grew by 8%, indicating resilience and potential growth in its core business.
- Long-Term Investment Value: Parsons' unique position in defense and cybersecurity makes it a solid long-term investment choice, especially as government AI spending shifts towards operational mission systems, providing a strong competitive advantage.
See More
Parsons Secures $136 Million USAF Contract
- Contract Value and Duration: Parsons has secured a $136 million contract from the USAF, with an eight-and-a-half-year performance period, indicating the company's ongoing growth potential in the defense sector.
- Scope of Work: The contract covers airfields, buildings, utilities, roads, and cybersecurity design services at Hill Air Force Base, showcasing the company's expertise in infrastructure development and cybersecurity.
- Market Reaction: Following the contract announcement, Parsons' shares rose over 1.5% in premarket trading, reflecting positive market sentiment despite a more than 21% decline in stock price this year.
- Strategic Implications: This contract marks Parsons' second award from the Pentagon this month, highlighting its competitiveness in the defense contracting market, as it aims to secure more task orders to meet infrastructure needs.
See More
Parsons Secures Up to $136M Contract with U.S. Air Force
- Significant Contract Value: Parsons has been selected by the U.S. Air Force and the 75th Civil Engineer Group at Hill Air Force Base for a multiple award task order contract valued at up to $136 million, indicating strong demand and market position in the defense sector.
- Long Contract Duration: The contract has an 8.5-year performance period, providing Parsons ample time and opportunities to expand its business in architect-engineer services, thereby enhancing long-term revenue stability.
- New Business Opportunities: Under the agreement, Parsons will compete for task orders covering architect-engineer services across the installation, which not only provides a new revenue stream but also potentially boosts its competitiveness in the government contracting market.
- Optimistic Financial Outlook: Parsons reiterates its 2026 outlook with a projected 6.6% organic growth rate in Federal Solutions and mentions $11 billion in unbooked awards, reflecting the company's growth potential and market confidence moving forward.
See More
Parsons Corporation Secures USAF Contract for Architect-Engineer Services
- Contract Value and Duration: Parsons Corporation has been awarded a multiple award task order contract by the USAF, valued at $136 million with an 8.5-year performance period, marking a significant expansion into defense infrastructure services.
- Comprehensive Service Scope: The contract encompasses architect-engineer services for Hill Air Force Base, including design, alteration, and repair of airfields, buildings, and utilities, demonstrating the company's capability to meet complex infrastructure needs.
- Strengthened Client Trust: The award reflects the USAF's ongoing trust in Parsons' ability to support mission-critical infrastructure projects, further solidifying the company's position in the market.
- Multi-Domain Support Capabilities: Beyond infrastructure solutions, Parsons provides all-domain support in areas such as cyber, electronic warfare, and advanced technology systems, enhancing its competitiveness in the defense sector.
See More
Parsons Corp. Faces Uncertainty Amid FAA Loss and Contract Challenges
- FAA Contract Loss: Parsons Corp. lost a heavily promoted $12.5 billion FAA contract bid, resulting in a nearly 40% stock price decline over the past six months, including a 21% drop in December, significantly impacting market confidence in the company.
- Profitability Improvement: Despite declining revenue expectations, Parsons achieved record profitability in Q1, with adjusted EBITDA margins rising to 10.8%, demonstrating the company's ability to maintain profit growth in a challenging environment.
- Record Backlog: The company's backlog reached a new high of $9.3 billion, primarily driven by projects tied to the U.S. Infrastructure Investment and Jobs Act and large-scale initiatives in the Middle East, providing strong support for future revenue growth.
- Cash Flow Pressure: While profitability is improving, the company's working capital is under strain, with net days' sales outstanding increasing from 58 to 72 days, as management cites collection delays in the Middle East and the impact of the shrinking confidential contract, adding uncertainty to future cash flows.
See More
Los Angeles D Line Subway Extension Project Launched
- Project Launch: The Los Angeles County Transportation Authority has officially opened Section 1 of the D Line Subway Extension, which aims to extend approximately nine miles under Wilshire Boulevard to enhance urban transit efficiency.
- Design and Construction: Section 1 includes the construction of 3.9 miles of subway connecting the current terminus at Wilshire/Western in Los Angeles to Beverly Hills, featuring three new underground stations at La Brea, Fairfax, and La Cienega.
- Community Impact: This project will improve commuter access for nearby neighborhoods and enhance accessibility to cultural and art institutions, significantly elevating the quality of life for residents.
- Sustainable Development: The D Line extension will provide safe and sustainable transit solutions that reduce traffic congestion and improve air quality, facilitating smoother commutes between Los Angeles and Beverly Hills.
See More
Parsons' Unique AI Investment Edge in Defense Sector
- Contract Extensions and New Opportunities: In March 2026, Parsons announced a $47 million classified contract extension, having served an unnamed U.S. government client for over six years, demonstrating its stability and trust in the defense sector.
- Key Project Developments: Two months later, Parsons secured a $136 million Air Force architect-engineer contract covering infrastructure and cybersecurity design services at an Air Force base, further solidifying its position in the defense infrastructure market.
- Financial Performance Analysis: In Q1 2026, Parsons reported revenue of $1.5 billion, a 4% year-over-year decline, but excluding a large fixed-price contract, revenue grew by 8%, indicating resilience and potential growth in its core business.
- Long-Term Investment Value: Parsons' unique position in defense and cybersecurity makes it a solid long-term investment choice, especially as government AI spending shifts towards operational mission systems, providing a strong competitive advantage.
See More
Parsons Secures $136 Million USAF Contract
- Contract Value and Duration: Parsons has secured a $136 million contract from the USAF, with an eight-and-a-half-year performance period, indicating the company's ongoing growth potential in the defense sector.
- Scope of Work: The contract covers airfields, buildings, utilities, roads, and cybersecurity design services at Hill Air Force Base, showcasing the company's expertise in infrastructure development and cybersecurity.
- Market Reaction: Following the contract announcement, Parsons' shares rose over 1.5% in premarket trading, reflecting positive market sentiment despite a more than 21% decline in stock price this year.
- Strategic Implications: This contract marks Parsons' second award from the Pentagon this month, highlighting its competitiveness in the defense contracting market, as it aims to secure more task orders to meet infrastructure needs.
See More
Parsons Secures Up to $136M Contract with U.S. Air Force
- Significant Contract Value: Parsons has been selected by the U.S. Air Force and the 75th Civil Engineer Group at Hill Air Force Base for a multiple award task order contract valued at up to $136 million, indicating strong demand and market position in the defense sector.
- Long Contract Duration: The contract has an 8.5-year performance period, providing Parsons ample time and opportunities to expand its business in architect-engineer services, thereby enhancing long-term revenue stability.
- New Business Opportunities: Under the agreement, Parsons will compete for task orders covering architect-engineer services across the installation, which not only provides a new revenue stream but also potentially boosts its competitiveness in the government contracting market.
- Optimistic Financial Outlook: Parsons reiterates its 2026 outlook with a projected 6.6% organic growth rate in Federal Solutions and mentions $11 billion in unbooked awards, reflecting the company's growth potential and market confidence moving forward.
See More
Parsons Corporation Secures USAF Contract for Architect-Engineer Services
- Contract Value and Duration: Parsons Corporation has been awarded a multiple award task order contract by the USAF, valued at $136 million with an 8.5-year performance period, marking a significant expansion into defense infrastructure services.
- Comprehensive Service Scope: The contract encompasses architect-engineer services for Hill Air Force Base, including design, alteration, and repair of airfields, buildings, and utilities, demonstrating the company's capability to meet complex infrastructure needs.
- Strengthened Client Trust: The award reflects the USAF's ongoing trust in Parsons' ability to support mission-critical infrastructure projects, further solidifying the company's position in the market.
- Multi-Domain Support Capabilities: Beyond infrastructure solutions, Parsons provides all-domain support in areas such as cyber, electronic warfare, and advanced technology systems, enhancing its competitiveness in the defense sector.
See More
