Last Updated: 07 Nov 2024
Executive Summary
Parsons Corp (PSN) is a technology-based solutions provider in defense, intelligence, and critical infrastructure markets. With a market capitalization of $11.83 billion, the company has been delivering steady revenue growth and profitability. Despite a high trailing PE ratio of 156.87, analysts remain bullish on PSN's long-term prospects, with a consensus target price of $119.91. The stock is currently trading at $110.69, offering a potential upside of approximately 8%.
Company Overview
Parsons Corp provides a range of services, including cybersecurity, engineering, project management, and technology integration. The company operates in North America, the Middle East, and internationally. PSN has a strong track record of delivering complex projects for government and commercial clients.
Fundamental Analysis
Revenue: PSN's revenue has grown steadily in recent years, reaching $6.51 billion in the trailing twelve months (TTM). Quarterly revenue growth of 0.276% YOY indicates continued momentum.
Earnings: The company's diluted EPS has increased to $0.71 TTM, reflecting a quarterly earnings growth of 0.554% YOY.
Profitability: PSN's profit margin is 1.21%, while its operating margin TTM stands at 6.51%. The company has maintained consistent profitability despite industry challenges.
Valuation: The stock is trading at a trailing PE of 156.87, which is significantly higher than the industry average. However, its forward PE of 14.93 suggests potential for future growth.
Technical Analysis
Trend: The stock has been in a bullish trend since mid-2022, breaking above its 200-day moving average.
Support and Resistance: The stock has found support around the $102 level and faces resistance at $115.
Momentum: The 50-day moving average is above the 200-day moving average, indicating positive momentum.
Short Term Outlook
In the short term, PSN's stock could continue to trade within the $102-$115 range. If the stock breaks above $115, it could potentially test its 52-week high of $114.68. Conversely, a drop below $102 could indicate a pullback.
Long Term Outlook
Analysts are optimistic about PSN's long-term prospects. The company's strong backlog and focus on high-growth markets position it well for continued revenue and earnings growth. The consensus analyst target price of $119.91 suggests a potential upside of approximately 8% from current levels.
Analyst Recommendations
Of the 11 analysts covering PSN, 6 have a Strong Buy rating, 4 have a Buy rating, and 1 has a Hold rating. There are no Sell or Strong Sell ratings. The consensus recommendation is Overweight.
