Parsons (NYSE:PSN) Shares Gap Down on Disappointing Earnings

Parsons Corporation (NYSE:PSN) shares gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. 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 (EPS) for the quarter, missing analysts’ consensus estimates of $0.81 by ($0.06). The company had revenue of $1.60 billion during the quarter, compared to analyst estimates of $1.68 billion. Parsons had a net margin of 3.79% and a return on equity of 11.81%. Parsons’s quarterly revenue was down 7.5% compared to the same quarter last year. During the same quarter last year, the business posted $0.78 EPS.

Key Stories Impacting Parsons

Here are the key news stories impacting Parsons this week:

• Positive Sentiment: Company reported record adjusted EBITDA and full-year net income gains, and Q4 operating cash flow rose sharply, supporting profitability and cash-generation narratives. GlobeNewswire: Parsons Reports Fourth Quarter and Fiscal Year 2025
• Positive Sentiment: Parsons won 15 contracts worth $100M+ (matching previous year) and maintained a TTM book-to-bill ≥1.0x, signaling continued large-contract wins despite near-term hiccups. GlobeNewswire: Parsons Reports Fourth Quarter and Fiscal Year 2025
• Positive Sentiment: Truist reaffirmed a “buy” rating and set a $85 price target (down from $90), giving upside from current levels and a credible institutional vote of confidence. Benzinga: Truist rating
• Neutral Sentiment: Management set FY2026 revenue guidance roughly in line with street expectations ($6.5B–$6.8B vs consensus ~ $6.6B), which reduces uncertainty but leaves earnings guidance ambiguous in public summaries. GlobeNewswire: FY2026 guidance
• Negative Sentiment: Q4 EPS of $0.75 missed consensus (~$0.81) and revenue of $1.60B missed estimates ($1.68B); revenue declined ~8% YoY — a primary driver of the initial selloff. Zacks: Q4 miss
• Negative Sentiment: Analysts and deep-dive coverage highlight backlog declines and contract headwinds — concrete near-term risk to revenue growth and the stock’s recovery pace. Yahoo Finance: Backlog declines
• Negative Sentiment: Short-term market reaction included a sharp intraday drop noted by several outlets; investors should watch upcoming backlog trends, contract timing and any more detailed FY26 EPS guidance. AAII: Stock drop analysis

Analyst Upgrades and Downgrades

A number of equities research analysts recently weighed in on the stock. Jefferies Financial Group reaffirmed a “hold” rating on shares of Parsons in a report on Thursday, January 15th. Bank of America lowered their target price on Parsons from $95.00 to $90.00 and set a “buy” rating for the company in a research note on Tuesday, December 30th. TD Cowen raised Parsons from a “hold” rating to a “buy” rating and dropped their target price for the stock from $90.00 to $75.00 in a research report on Wednesday, December 10th. Truist Financial reiterated a “buy” rating and issued a $85.00 price target (down previously from $90.00) on shares of Parsons in a research note on Thursday. Finally, William Blair upgraded Parsons from a “market perform” rating to an “outperform” rating in a research note on Thursday, November 20th. Twelve research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $83.92.

Institutional Investors Weigh In On Parsons

A number of institutional investors have recently made changes to their positions in PSN. Vanguard Group Inc. boosted its holdings in Parsons by 2.6% in the third quarter. Vanguard Group Inc. now owns 5,077,310 shares of the company’s stock worth $421,011,000 after purchasing an additional 130,694 shares during the period. Artisan Partners Limited Partnership lifted its position in shares of Parsons by 10.3% in the 3rd quarter. Artisan Partners Limited Partnership now owns 2,331,921 shares of the company’s stock worth $193,363,000 after buying an additional 217,342 shares during the last quarter. William Blair Investment Management LLC boosted its holdings in shares of Parsons by 72.5% in the 2nd quarter. William Blair Investment Management LLC now owns 1,889,281 shares of the company’s stock valued at $135,594,000 after buying an additional 793,807 shares during the period. Dimensional Fund Advisors LP grew its position in shares of Parsons by 1.8% during the 4th quarter. Dimensional Fund Advisors LP now owns 1,712,937 shares of the company’s stock valued at $105,863,000 after buying an additional 30,351 shares during the last quarter. Finally, Channing Capital Management LLC raised its stake in Parsons by 20.3% during the second quarter. Channing Capital Management LLC now owns 1,277,286 shares of the company’s stock worth $91,671,000 after acquiring an additional 215,106 shares during the period. 98.02% of the stock is currently owned by institutional investors.

Parsons Stock Up 3.9%

The company has a debt-to-equity ratio of 0.45, a current ratio of 1.75 and a quick ratio of 1.67. The stock’s fifty day simple moving average is $66.62 and its 200-day simple moving average is $76.21. The stock has a market cap of $6.67 billion, a P/E ratio of 28.47, a PEG ratio of 3.37 and a beta of 0.66.

About Parsons

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.