Critical Contrast: Parsons (PSN) and Its Peers

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Parsons and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Parsons	1	4	11	0	2.62
Parsons Competitors	1590	6465	9175	431	2.48

Parsons presently has a consensus target price of $63.50, suggesting a potential upside of 26.06%. As a group, “Professional Services” companies have a potential upside of 27.39%. Given Parsons’ competitors higher possible upside, analysts clearly believe Parsons has less favorable growth aspects than its competitors.

Insider and Institutional 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 company insiders. Comparatively, 17.1% of shares of all “Professional Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

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

Earnings & Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Parsons	$6.36 billion	$241.14 million	36.77
Parsons Competitors	$3.39 billion	$228.38 million	33.64

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

Profitability

This table compares Parsons and its competitors’ 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	-0.13%	35.53%	4.39%

Summary

Parsons competitors beat Parsons on 7 of the 13 factors compared.

About Parsons

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.