Parsons (NYSE:PSN) Releases Earnings Results, Misses Expectations By $0.82 EPS

Parsons (NYSE:PSN) issued its earnings results on Wednesday. The company reported ($0.06) EPS for the quarter, missing analysts’ consensus estimates of $0.76 by ($0.82), FiscalAI reports. Parsons had a net margin of 2.50% and a return on equity of 8.10%. The firm had revenue of $1.59 billion during the quarter, compared to analysts’ expectations of $1.61 billion. During the same quarter in the prior year, the company earned $0.78 EPS. Parsons’s quarterly revenue was down .5% on a year-over-year basis.

Here are the key takeaways from Parsons’ conference call:

• 2026 guidance was reduced: Revenue guidance fell by $300 million at the midpoint to $6.2 billion–$6.5 billion, while adjusted EBITDA guidance was reduced by $115 million to $500 million–$560 million. The changes reflect $118 million of charges, slower infrastructure ramp-up, and federal contract funding and award delays.
• Underlying bookings and backlog remained strong. Second-quarter awards rose 24% year over year to $1.9 billion, producing a 1.2x book-to-bill ratio, while backlog reached $9.3 billion, including $6.6 billion funded. Federal Solutions bookings increased 51% and Critical Infrastructure achieved its 23rd consecutive quarter with book-to-bill at or above 1.0x.
• Normalized profitability improved, led by Critical Infrastructure. Normalized adjusted EBITDA rose 8% to $161 million, with margin expanding 70 basis points to 10.1%; Critical Infrastructure margin increased 140 basis points to 11.9%, supported by favorable mix, Middle East growth, and accretive acquisitions.
• Parsons is reshaping its portfolio by divesting two lower-margin advisory contracts and exiting two difficult remote programs, while absorbing a $41 million joint-venture charge following historic weather-related disruption. Management expects these actions to improve long-term margins and reduce risk, but the remote-contract divestiture remains subject to approval and is expected to close in the third quarter.
• Technology-led federal demand remains a key growth driver. The company won major missile defense, cyber, space, and Navy awards, with four of its five quarterly contracts exceeding $100 million incorporating artificial intelligence; management expects federal margins to expand to 9.4% in the second half as product sales and accretive contracts ramp.

Parsons Price Performance

Shares of Parsons stock traded up $1.67 on Friday, hitting $44.84. The company’s stock had a trading volume of 1,052,987 shares, compared to its average volume of 1,326,792. The company has a debt-to-equity ratio of 0.54, a quick ratio of 1.75 and a current ratio of 1.66. Parsons has a 1 year low of $36.26 and a 1 year high of $89.50. The firm has a fifty day moving average price of $55.28 and a 200-day moving average price of $58.19. The company has a market capitalization of $4.80 billion, a price-to-earnings ratio of 30.73, a price-to-earnings-growth ratio of 1.27 and a beta of 0.66.

Key Parsons News

Here are the key news stories impacting Parsons this week:

• Positive Sentiment: Several analysts still view the post-earnings decline as an opportunity. UBS, Citigroup, Stifel, Truist and Barclays maintained positive ratings, although they reduced their price targets to $58, $53, $66, $60 and $60, respectively. These targets imply substantial potential upside from recent levels. Citigroup price target
• Positive Sentiment: Management outlined 2026 revenue guidance of $6.2 billion to $6.5 billion and is targeting completion of a divestiture in the third quarter. The earnings call also highlighted strong bookings and strategic growth opportunities, which could support longer-term recovery. Parsons 2026 outlook
• Neutral Sentiment: Parsons’ stock reached a new one-year low after the disappointing report, leaving shares significantly below their 52-week high. The low valuation relative to prior trading levels may attract bargain hunters, but it also reflects substantial execution risk. Parsons reaches one-year low
• Negative Sentiment: Second-quarter adjusted EBITDA fell 72%, while adjusted EBITDA margin contracted by 670 basis points and net income declined by $70 million year over year. Parsons also reported a loss of $0.06 per share versus analysts’ expected $0.76 profit, with revenue of $1.59 billion below the $1.61 billion consensus. Parsons Q2 earnings call highlights
• Negative Sentiment: Parsons cut 2026 adjusted EBITDA guidance to $500 million–$560 million from $615 million–$675 million and reduced revenue guidance to $6.2 billion–$6.5 billion from $6.5 billion–$6.8 billion. The company cited project delays, a terminated fixed-price contract, portfolio-shaping actions and a joint-venture program charge. Parsons guidance reduction
• Negative Sentiment: Several law firms announced investigations into possible federal securities-law violations related to Parsons’ guidance reductions and disclosures. Although these announcements do not establish wrongdoing, they add legal and reputational uncertainty and may weigh on sentiment. Parsons securities-fraud investigation

Wall Street Analysts Forecast Growth

PSN has been the topic of a number of research reports. Jefferies Financial Group reiterated a “hold” rating on shares of Parsons in a research note on Wednesday, July 8th. Robert W. Baird reiterated a “neutral” rating and set a $60.00 price objective on shares of Parsons in a research note on Monday, April 13th. Stifel Nicolaus decreased their price objective on Parsons from $79.00 to $66.00 and set a “buy” rating for the company in a report on Thursday. Truist Financial restated a “buy” rating and issued a $60.00 target price (down from $75.00) on shares of Parsons in a research note on Thursday. Finally, TD Cowen reaffirmed a “buy” rating on shares of Parsons in a report on Wednesday. Nine equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus target price of $66.82.

Insiders Place Their Bets

In other Parsons news, Director Mark Keith Holdsworth acquired 10,000 shares of the company’s stock in a transaction on Tuesday, May 12th. The shares were bought at an average cost of $51.27 per share, with a total value of $512,700.00. Following the completion of the acquisition, the director owned 39,918 shares in the company, valued at approximately $2,046,595.86. This trade represents a 33.42% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, Director George L. Ball acquired 10,000 shares of the business’s stock in a transaction dated Wednesday, May 13th. The stock was acquired at an average price of $50.00 per share, with a total value of $500,000.00. Following the completion of the transaction, the director directly owned 150,383 shares of the company’s stock, valued at approximately $7,519,150. This represents a 7.12% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Over the last 90 days, insiders have acquired 32,500 shares of company stock worth $1,637,325. 1.31% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Parsons

A number of large investors have recently added to or reduced their stakes in PSN. Public Employees Retirement System of Ohio boosted its holdings in shares of Parsons by 0.9% in the third quarter. Public Employees Retirement System of Ohio now owns 17,029 shares of the company’s stock valued at $1,412,000 after acquiring an additional 144 shares during the period. Kennedy Capital Management LLC increased its holdings in shares of Parsons by 0.4% in the 4th quarter. Kennedy Capital Management LLC now owns 47,680 shares of the company’s stock valued at $2,947,000 after acquiring an additional 194 shares during the period. NewEdge Advisors LLC raised its position in Parsons by 38.0% in the 1st quarter. NewEdge Advisors LLC now owns 959 shares of the company’s stock valued at $57,000 after purchasing an additional 264 shares during the last quarter. Bank of Montreal Can boosted its stake in Parsons by 5.4% during the 4th quarter. Bank of Montreal Can now owns 7,003 shares of the company’s stock worth $433,000 after purchasing an additional 360 shares during the period. Finally, UMB Bank n.a. boosted its stake in Parsons by 59.6% during the 4th quarter. UMB Bank n.a. now owns 972 shares of the company’s stock worth $60,000 after purchasing an additional 363 shares during the period. 98.02% of the stock is currently owned by institutional investors and hedge funds.

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.