Critical Comparison: Parsons (PSN) & The Competition

Parsons (NYSE:PSN) is one of 203 public companies in the “Professional Services” industry, but how does it weigh in compared to its rivals? We will compare Parsons to similar businesses based on the strength of its earnings, institutional ownership, valuation, analyst recommendations, dividends, profitability and risk.

Profitability

This table compares Parsons and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Parsons	2.33%	8.11%	3.74%
Parsons Competitors	-0.59%	20.60%	4.33%

Institutional & Insider Ownership

98.0% of Parsons shares are owned by institutional investors. Comparatively, 57.4% of shares of all “Professional Services” companies are owned by institutional investors. 1.3% of Parsons shares are owned by insiders. Comparatively, 17.2% of shares of all “Professional Services” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Parsons and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Parsons	1	4	11	0	2.62
Parsons Competitors	1583	6445	9166	430	2.48

Parsons presently has a consensus price target of $63.50, suggesting a potential upside of 22.84%. As a group, “Professional Services” companies have a potential upside of 26.35%. Given Parsons’ rivals higher possible upside, analysts clearly believe Parsons has less favorable growth aspects than its rivals.

Earnings and Valuation

This table compares Parsons and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Parsons	$6.36 billion	$241.14 million	37.73
Parsons Competitors	$3.29 billion	$228.38 million	35.43

Parsons has higher revenue and earnings than its rivals. Parsons is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Parsons has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Parsons’ rivals have a beta of 0.97, suggesting that their average stock price is 3% less volatile than the S&P 500.

Summary

Parsons beats its rivals on 7 of the 13 factors compared.

Parsons Company Profile

Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. The company operates through Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment provides critical technologies, such as cybersecurity; missile defense; intelligence; space launch and ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and bio surveillance solutions to U.S. Department of Defense, including military services; Missile Defense Agency, the Department of Energy; the Department of State; the Department of Homeland Security, and the Federal Aviation Administration. The Critical Infrastructure segment provides management, design, and engineering services, as well as offers leveraging sensor solutions. This segment develops digital solutions for next generation aviation, rail and transit, bridges, roads, and highways; and provides water and wastewater treatment systems; AI/ML, and digital twin and cyber systems integration services; planning, engineering, and management services for infrastructure, including bridges and tunnels, roads and highways, water and wastewater, and dams and reservoirs. Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.