Parsons (NYSE:PSN) Shares Gap Down After Earnings Miss

Parsons Corporation (NYSE:PSN) gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $70.21, but opened at $60.78. Parsons shares last traded at $61.81, with a volume of 780,510 shares.

The company reported $0.75 earnings per share for the quarter, missing analysts’ consensus estimates of $0.81 by ($0.06). Parsons had a net margin of 3.69% and a return on equity of 11.98%. The company had revenue of $1.60 billion for the quarter, compared to analysts’ expectations of $1.68 billion. During the same quarter in the previous year, the business posted $0.78 EPS. The business’s quarterly revenue was down 7.5% on a year-over-year basis.

Key Headlines Impacting Parsons

Here are the key news stories impacting Parsons this week:

• Positive Sentiment: Large defense and government contract wins that support near‑term revenue: Parsons secured a $125M single‑award task order with the U.S. Army (five years) and a $91M contract extension for U.S. diplomatic mission security, reinforcing its backlog and defense exposure. Read More.
• Positive Sentiment: Full‑year 2025 operating metrics were strong: Parsons reported record adjusted EBITDA ($609M FY25) and record net income ($241M), plus improved adjusted EBITDA margin, which supports medium‑term profitability expectations. Read More.
• Neutral Sentiment: Revenue guidance roughly in line with consensus but EPS guidance was unclear in the release — management gave FY26 revenue guidance around $6.5B–$6.8B (consensus ~ $6.6B), which is not a clear beat that would offset the quarter’s miss. The lack of a clear EPS target in initial headlines likely added uncertainty. Read More.
• Neutral Sentiment: Management commentary and the earnings call provide more context on backlog, book‑to‑bill and margin drivers — investors should review the call transcript/slide deck for cadence on award timing and margin levers. Read More.
• Negative Sentiment: Quarterly miss: Q4 EPS of $0.75 missed consensus (~$0.81) and revenue of $1.60B missed estimates (~$1.68B); revenue fell ~7–8% year‑over‑year, raising concerns about near‑term growth momentum. Read More.
• Negative Sentiment: Book‑to‑bill slipped to 0.9x in the quarter (though TTM has stayed ≥1.0), and quarterly organic revenue declined — these signs suggest order intake timing and revenue recognition drove the miss and create short‑term visibility risk. Read More.
• Negative Sentiment: Market reaction: coverage and headlines (“Why Parsons shares are plunging today”) point to the EPS/revenue miss and guidance ambiguity as the proximate causes of the selloff; high intraday volume confirms the result triggered outsized trading. Read More.

Analyst Ratings Changes

Several research firms recently issued reports on PSN. Jefferies Financial Group reiterated a “hold” rating on shares of Parsons in a research note on Thursday, January 15th. Truist Financial lowered their target price on shares of Parsons from $100.00 to $90.00 and set a “buy” rating on the stock in a research note on Friday, December 5th. Weiss Ratings restated a “hold (c)” rating on shares of Parsons in a research report on Monday, December 29th. Stifel Nicolaus reduced their price target on Parsons from $94.00 to $90.00 and set a “buy” rating for the company in a report on Tuesday, December 23rd. Finally, Bank of America dropped their price objective on Parsons from $95.00 to $90.00 and set a “buy” rating on the stock in a report on Tuesday, December 30th. Twelve analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $85.54.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of PSN. Vanguard Group Inc. grew its holdings in Parsons by 2.6% during the 3rd quarter. Vanguard Group Inc. now owns 5,077,310 shares of the company’s stock valued at $421,011,000 after buying an additional 130,694 shares during the last quarter. Artisan Partners Limited Partnership boosted its stake in shares of Parsons by 10.3% during the third quarter. Artisan Partners Limited Partnership now owns 2,331,921 shares of the company’s stock valued at $193,363,000 after acquiring an additional 217,342 shares during the last quarter. William Blair Investment Management LLC increased its position in Parsons by 72.5% during the 2nd quarter. William Blair Investment Management LLC now owns 1,889,281 shares of the company’s stock worth $135,594,000 after purchasing an additional 793,807 shares in the last quarter. Dimensional Fund Advisors LP raised its stake in Parsons by 2.8% in the 3rd quarter. Dimensional Fund Advisors LP now owns 1,682,586 shares of the company’s stock valued at $139,511,000 after purchasing an additional 45,922 shares during the last quarter. Finally, Channing Capital Management LLC lifted its holdings in Parsons by 20.3% in the 2nd quarter. Channing Capital Management LLC now owns 1,277,286 shares of the company’s stock valued at $91,671,000 after purchasing an additional 215,106 shares in the last quarter. 98.02% of the stock is currently owned by institutional investors and hedge funds.

Parsons Price Performance

The company has a market capitalization of $6.40 billion, a price-to-earnings ratio of 27.59, a PEG ratio of 3.93 and a beta of 0.66. The company has a current ratio of 1.67, a quick ratio of 1.67 and a debt-to-equity ratio of 0.46. The company’s 50 day simple moving average is $67.05 and its 200-day simple moving average is $76.30.

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.