Quality Investor

Parsons Corporation

Rank #284Capital ReturnWatchlistCompare with other stocks

PSN · NYSE · Technology

Parsons Corporation (PSN) — Rank #284 by gross profitability (GP/assets 0.24) · ROE 9.1% · Piotroski F-Score 6 / 9.

As-of 2026-10-30 · CIK 0000275880 · all metrics point-in-time as of the filing date.

About

Parsons Corporation provides design, engineering and technical services, and smart and agile software for the United States federal government and critical infrastructure customers worldwide.

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It operates through Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment offers critical technologies, such as cyber; air and missile defense; intelligence; aviation modernization; electronic warfare; space ground systems, cislunar, A-PNT, and classified sensors; geospatial and signals intelligence; environmental remediation; border security and counter-drug, critical infrastructure protection; counter unmanned air systems; biometrics; and bio surveillance solutions. This segment also provides software and hardware, and technical expertise; satellite ground systems support and operations, flight dynamics, data fusion and analytics, platform system integration, directed energy, joint all-domain operations, and command and control systems; digital landscape, including full-spectrum cyber, defensive cyber operations, information operations, and analytics; and electronic warfare, multi-domain operations, mission support and national to tactical operations, as well as cyber solutions and products. The Critical Infrastructure segment develops digital solutions for aviation, rail and transit, bridges, roads, highways, and urban destinations. This segment also provides planning, engineering, and management services for complex infrastructure comprising bridges, tunnels, roads and highways, and water and wastewater systems; intelligent transportation systems, utilities, environmental remediation, emerging contaminants, aviation, and rail and transit, as well as ParsonsX, a digital transformation organization; and multi-disciplinary design, technical, and management solutions.

Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.

Industry
Information Technology Services
Sector
Technology
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
December 31

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

21,000

Industry

Information Technology Services

Exchange

NYSE

11/12

Flags passed

PSN fails 1 critical flag

Passes 11 of 12 quality flags

  • FAIL
    Revenue declining YoY

    Revenue contracted year over year

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Operating leverage expanding · RPO outpacing revenue · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.24
Return on equity
9.1%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
1.18
Current ratio
1.59×
Net cash
-$1.06B

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
0.7%

Growth

1/2 pass
Revenue growth
-5.7%
Piotroski F-Score
6 / 9
Share dilution
-2.2%

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Does it make money well?

Warning: Revenue declining YoY · GP/assets 0.24

Gross profitability (GP / assets)

0.24

Primary signal (Novy-Marx).

6th of 8 SIC 7373 peers

Return on equity

9.1%

Gross margin

22.5%

6th of 7 SIC 7373 peers

Revenue growth (YoY)

-5.7%

RPO growth (YoY)

6.0%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

14.9%

Revenue CAGR (5Y)

10.2%

Earnings CAGR (3Y)

35.6%

FCF CAGR (3Y)

25.6%

Cash Flow Health

Is the cash real?

No warning flags · FCF 70% above net income

Free cash flow

$410.41M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

70.2%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.7%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net debt $1.06B, F-Score 6/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

1.18

6th of 8 SIC 7373 peers (best = lowest)

Current ratio

1.59×

6th of 8 SIC 7373 peers

Quick ratio

0.87×

Net cash

-$1.06B

Cash & equivalents minus total debt.

Piotroski F-Score

6 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

4.0 / 5

Strong
Share count trend(net buybacks)
-2.2%4/5 Strong
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory(deleveraging)
8.4%5/5 Strong

Lifecycle Phase History

20202025
Value
Decline
Op. Leverage
Hypergrowth
Capital Return

Price History

PSN+24.4% · +4.5% CAGRSPY+82.9% · +12.8% CAGR