Parsons Corporation (NYSE: PSN) just had one of its wildest trading days since going public. On Friday, December 5, 2025, the stock suffered a sharp double‑digit drop after the U.S. Federal Aviation Administration chose rival Peraton—not Parsons—as prime integrator for the massive “Brand New Air Traffic Control System” (BNATCS) modernization program. [1]
Ironically, the sell‑off landed on the same day Parsons announced fresh wins across defense and infrastructure, including a $3.5 billion contract vehicle with the Defense Threat Reduction Agency (DTRA) and major transportation projects in Missouri and the Seattle area. [2]
Below is a full breakdown of what happened on December 5, 2025, and what the latest forecasts and analyses are saying about PSN stock.
Parsons Stock on December 5, 2025: How Deep Was the Drop?
By late in Friday’s session, Parsons shares were trading around the mid‑$60s, down roughly 20% from Thursday’s close near $84.46. [3]
Key trading stats for December 5 (approximate, intraday and closing):
- Previous close (Dec. 4): $84.46 [4]
- Intraday low: about $62.33 [5]
- Recent trade / near close: around $66–67 per share [6]
- Intraday drop vs. previous close: roughly 20–26%, depending on the price point you use
- Volume: more than 11 million shares, far above normal daily levels [7]
Premarket commentary already flagged Parsons as one of the day’s worst performers in the S&P 500, with futures coverage noting PSN among the biggest losers before the opening bell. [8] Some outlets described the move as potentially one of the steepest single‑day declines in the stock’s history, driven by investors repricing a major lost opportunity rather than a sudden collapse in current earnings. [9]
The Trigger: FAA Picks Peraton Over Parsons for the BNATCS Mega‑Program
The main shock for PSN shareholders is straightforward:
- The FAA and U.S. Department of Transportation confirmed that Peraton will be the sole “prime integrator” for the new Brand New Air Traffic Control System, a first‑of‑its‑kind, performance‑based contract to overhaul the nation’s aging air‑traffic infrastructure. [10]
- Congress has already approved $12.5 billion in initial funding, with the administration seeking an additional $19–20 billion, implying a potential total program value of roughly $30+ billion over time. [11]
- Peraton beat out a joint bid from Parsons and IBM, after months of coverage positioning the two as the final contenders for the role. [12]
For Parsons, the loss is painful because BNATCS was widely viewed as:
- A multi‑year, high‑margin program‑management opportunity
- A potential anchor contract that could have supported elevated growth and valuation multiples through the late 2020s
- A marquee proof‑point for Parsons’ ambitions in large‑scale aviation and infrastructure modernization
Analysts at Raymond James explicitly framed the decision as a major negative surprise to investors and a catalyst for a valuation reset, noting that PSN had been trading at a premium partly on BNATCS expectations. [13]
Offsetting Good News: New $3.5B DTRA Vehicle and Fresh Infrastructure Wins
The market’s focus on BNATCS overshadowed a string of very real wins announced the same day (and in recent weeks) that support Parsons’ long‑term backlog and positioning.
1. DTRA CTRIC IV: Up to $3.5 Billion in WMD‑Threat Reduction Work
On December 5, Parsons said it had been selected as an awardee on the Cooperative Threat Reduction Integration Contract IV (CTRIC IV) with the Defense Threat Reduction Agency. [14]
Key points:
- Ceiling value:$3.5 billion across multiple awardees
- Structure: Indefinite‑delivery, indefinite‑quantity (IDIQ) contract
- Term: 5‑year base period + one 5‑year option period (potentially 10 years total) [15]
- Mission: Task orders focused on reducing threats from chemical, biological, radiological and nuclear (CBRN) weapons, including eliminating or securing materials, delivery systems, and related infrastructure, and helping partner nations build counter‑proliferation capabilities. [16]
Parsons previously worked on CTRIC III, giving it experience and customer relationships that should help when competing for task orders under CTRIC IV. [17]
2. Sound Transit: Position on a $1 Billion Transit Design MATOC
Also on December 5, Parsons announced a spot on Sound Transit’s $1 billion ceiling Multiple Award Task Order Contract (MATOC) for design services supporting the Seattle‑area transit agency’s $60 billion capital program. [18]
- The MATOC runs five years, with two potential one‑year extensions. [19]
- Parsons will provide architecture, engineering, and related services for light‑rail extensions, resiliency upgrades, and state‑of‑good‑repair projects across the Puget Sound region. [20]
- The award builds on Parsons’ existing roles on Sound Transit’s Federal Way Link Extension, Everett Link Extension, and Downtown Redmond Link projects. [21]
3. Missouri I‑70: Lead Designer on a $441 Million Highway Project
In another GlobeNewswire release on Friday, Parsons said it will serve as lead designer on the $441 million Interstate 70 Rocheport‑to‑Columbia design‑build project in Missouri, teaming with Emery Sapp & Sons. [22]
- The project will add a third lane in each direction, modernize pavement and bridges, and upgrade interchanges along a crucial freight and passenger corridor. [23]
- Construction is expected to begin in mid‑2026 and finish by December 2029, offering a long, visible revenue tail. [24]
4. Pacific Deterrence Initiative: Position on a $15 Billion MACC
On November 11, Parsons disclosed a position on the $15 billion Pacific Deterrence Initiative Multiple Award Construction Contract (PDI MACC) run by the Navy’s facilities command. [25]
- The vehicle includes a 5‑year base period plus three one‑year options. [26]
- Parsons will compete for projects exceeding $100 million related to runways, hangars, waterfront facilities, storage infrastructure, and energy and fuel systems in the Indo‑Pacific. [27]
5. U.S. Coast Guard Biometrics Modernization
In November, Parsons also announced a contract to modernize the Coast Guard’s “Biometrics at Sea” system, providing hardware, software, and technical support to strengthen maritime identity and security capabilities. [28]
Taken together, these wins underscore that Parsons’ pipeline remains robust across defense and infrastructure, even though the headline FAA opportunity slipped away.
Q3 2025 Earnings: Mixed Top Line, Strong Underlying Trends
Friday’s drama comes just weeks after Parsons released third‑quarter 2025 results, which showed a mixed but generally resilient fundamental picture.
According to earnings summaries and follow‑up coverage: [29]
- Revenue: About $1.62 billion, down ~10% year‑over‑year, largely due to a large classified (“confidential”) program rolling off.
- Ex‑confidential contract: Revenue would have grown roughly 14% (about 9% organically), driven by critical infrastructure, transportation, urban development, and space/missile defense work. [30]
- Adjusted EPS:$0.86, down from $0.95 a year earlier but well above consensus estimates in the mid‑$0.70s. [31]
- GAAP EPS:$0.59, versus $0.65 in the prior‑year quarter. [32]
- Adjusted EBITDA: About $158 million, a 5% decline, but with margin expanding 60 basis points to 9.8%, reflecting better mix and accretive acquisitions. [33]
- Backlog: Roughly $8.8 billion, 72% funded, the highest since Parsons’ IPO, and a book‑to‑bill ratio of 1.0x (new awards matching revenue). [34]
Management also trimmed full‑year 2025 revenue guidance to about $6.4–6.5 billion, down from $6.48–6.68 billion, while reiterating adjusted EBITDA and cash‑flow targets at the midpoint. [35]
Several independent analyses noted that:
- Over the last five years, Parsons has grown revenue at ~10% annually, with faster EPS growth helped by margin expansion and share repurchases. TechStock²
- The revenue decline in Q3 is primarily optics around one large contract ramping down, rather than broad weakness in the portfolio. [36]
December 5 Analyst Moves: Downgrades, Target Cuts – But Still Mostly Bullish
The BNATCS decision forced analysts to rethink their models in real time on Friday.
Raymond James: Double Downgrade on FAA Snub
- Raymond James cut Parsons from “Strong Buy” to “Market Perform”, a two‑notch downgrade, citing the FAA award to Peraton as the key driver. [37]
- The firm highlighted that PSN had been trading at roughly a 35% valuation premium to peers, partly on the expectation of a BNATCS win, and that this premium is now likely to compress. TechStock²+1
Truist Securities: Target Cut, Buy Rating Maintained
- Truist Securities lowered its price target from $100 to $90 but maintained a Buy rating, explicitly tying the cut to the FAA contract loss. [38]
- Truist pointed out that even after the reduction, the new target implies roughly 35–40% upside from the mid‑$60s. [39]
Other Moves: Mizuho and Street Commentary
- Market roundups also noted that Mizuho shifted Parsons to a Hold rating, reflecting a more cautious stance after the BNATCS disappointment. [40]
- Additional coverage from platforms like Seeking Alpha, StockInvest, and Stocktwits echoed the theme that the FAA loss removes a meaningful upside scenario for 2026–2027 growth, even as the core franchise remains solid. [41]
Consensus Forecasts and Ratings (As of December 5, 2025)
Across the major aggregators, consensus remains constructive, though not all numbers yet fully reflect today’s shock:
- StockAnalysis:
- Consensus rating: “Strong Buy” from 12–13 analysts
- Average 12‑month price target: about $91.17, with a range of $80–$107, implying roughly 37% upside from around $67. [42]
- MarketBeat:
- Consensus rating: “Moderate Buy” based on 15 analysts (10 Buy, 5 Hold)
- Average target: $91.91, implying roughly 38% upside from a reference price near $66–67. [43]
- Public.com:
- Based on data from 11 analysts, consensus rating: Buy (with a majority “Strong Buy”)
- Average target: about $92.9 as of December 5. [44]
Most of these price targets were set before the final FAA decision, so investors should expect further revisions in the coming days and weeks. TechStock²
Valuation After the Sell‑Off: How “Cheap” Is PSN Now?
Rough, real‑time metrics from StockAnalysis, GuruFocus, and other data providers suggest that PSN now trades at: TechStock²+1
- Share price: mid‑$60s (around $66–67 late on December 5) [45]
- Market cap: roughly $6.8–7.0 billion TechStock²
- Trailing EPS: around $2.1–2.2 per share, implying a trailing P/E in the high‑20s to low‑30s at today’s levels (Truist cited a P/E near 39x earlier in the session when shares traded closer to $65.51). [46]
- Forward EPS (2025E): Street forecasts cluster around $3.2–3.3, implying a forward P/E in the high‑teens to ~20x. TechStock²
- Price‑to‑sales: roughly 1.1–1.4x
- Free‑cash‑flow yield: about 4–4.5% on a trailing basis
- Leverage: net‑debt‑to‑EBITDA around 1.6x, generally considered manageable for a government‑services and infrastructure contractor. TechStock²
Before Friday, Raymond James flagged PSN as trading at the richest valuation in its peer group; after today’s drop, that premium has narrowed but likely remains above classic defense primes, closer to high‑growth government IT and infrastructure names. TechStock²+1
How the Forecasts Look Now: Revenue, EPS, and Growth Path
Street‑level forecasts compiled by StockAnalysis and others, much of it pre‑BNATCS, sketch a path of near‑term digestion followed by re‑acceleration: TechStock²
- Revenue outlook:
- 2024 (actual): roughly $6.7–6.8 billion
- 2025 (forecast): around $6.5 billion, reflecting the confidential contract roll‑off and a softer near‑term top line
- 2026 (forecast): near $6.9 billion, implying a return to mid‑single‑digit revenue growth
- EPS outlook:
- 2024 (actual): about $2.1–2.2
- 2025 (forecast): around $3.2–3.3, driven by mix, margin expansion, and operating leverage
- 2026 (forecast): mid‑single‑digit EPS growth off the 2025 base
Algorithmic forecasting sites had previously projected PSN trading in the high‑$70s to mid‑$80s for 2025—levels that now look optimistic unless sentiment and contract flow recover more quickly than feared. TechStock²
Key Risks for Parsons Stock After December 5
Even with a strong contract pipeline, today’s sell‑off highlights several important risks for investors to monitor: TechStock²+2MarketScreener+2
- Mega‑contract concentration and “binary” outcomes
- BNATCS showed how losing a single, mega‑program can instantly erase a big chunk of perceived future upside. Future large bids in missile defense, infrastructure, or classified systems carry similar all‑or‑nothing sentiment risk.
- Dependence on government spending
- Parsons is heavily tied to U.S. federal budgets across defense, intelligence, and infrastructure. Budget fights, continuing resolutions, or shifting priorities could slow awards or pressure margins.
- Valuation risk
- Even post‑drop, PSN trades at a premium to many traditional defense names. If growth or margins undershoot forecasts—or if more big bids go to competitors—that premium could compress further.
- Backlog conversion and task‑order wins
- Vehicles like CTRIC IV, PDI MACC, and the Sound Transit MATOC are ceilings, not guaranteed revenue. Parsons still has to win and execute task orders to turn those ceilings into cash. [47]
What to Watch Next for PSN Investors
For anyone following Parsons stock, several near‑term catalysts and data points stand out: [48]
- Task‑order flow under CTRIC IV and the PDI MACC – how quickly do these new vehicles turn into funded work?
- Infrastructure execution on the I‑70 project and Sound Transit MATOC, both of which are multiyear, high‑profile transportation programs.
- Margin and cash‑flow trends – can Parsons keep expanding EBITDA margins above 10% and sustain solid free‑cash‑flow generation even with slower top‑line growth?
- Further analyst revisions – will more firms follow Raymond James in downgrading, or will updated models still support the current wave of Buy/Strong Buy ratings?
- Upcoming investor appearances, including Parsons’ fireside chat at the Raymond James TMT and Consumer Conference on December 9, where management is likely to field questions on BNATCS, contract strategy, and capital allocation. [49]
Bottom Line: Narrative Reset, Not a Broken Business
As of December 5, 2025, Parsons Corporation is experiencing a sharp narrative reset rather than a fundamental collapse: MarketBeat+3TechStock²+3MarketScreener+3
- The FAA’s decision removes a highly visible upside scenario and forces investors to rethink growth assumptions for 2026–2027.
- At the same time, new defense and infrastructure vehicles—DTRA CTRIC IV, PDI MACC, Sound Transit, I‑70, and Coast Guard biometrics—reinforce Parsons’ role in national security and critical infrastructure.
- Q3 results show underlying growth, expanding margins, and record funded backlog, even if headline revenue is noisy.
- Wall Street still generally expects meaningful upside over the next 12 months from today’s lower price, though those forecasts may drift as more analysts update their models post‑BNATCS.
For readers, none of this is personalized investment advice—but it does frame the updated picture: Parsons has traded one giant “moonshot” contract for a broader, more diversified (if less spectacular) portfolio of long‑dated defense and infrastructure work. Whether that trade ultimately proves attractive will depend on how effectively the company converts its growing backlog into high‑margin, cash‑generating revenue over the next few years.
References
1. www.reuters.com, 2. www.quiverquant.com, 3. www.chartmill.com, 4. www.chartmill.com, 5. www.rttnews.com, 6. stockanalysis.com, 7. public.com, 8. www.barrons.com, 9. stocktwits.com, 10. www.reuters.com, 11. www.politico.com, 12. www.reuters.com, 13. www.gurufocus.com, 14. www.quiverquant.com, 15. www.quiverquant.com, 16. www.quiverquant.com, 17. www.quiverquant.com, 18. www.globenewswire.com, 19. www.globenewswire.com, 20. www.globenewswire.com, 21. www.globenewswire.com, 22. www.globenewswire.com, 23. www.globenewswire.com, 24. www.globenewswire.com, 25. www.globenewswire.com, 26. www.globenewswire.com, 27. www.globenewswire.com, 28. finance.yahoo.com, 29. www.govconwire.com, 30. www.govconwire.com, 31. www.chartmill.com, 32. www.govconwire.com, 33. www.govconwire.com, 34. www.govconwire.com, 35. www.govconwire.com, 36. www.govconwire.com, 37. www.gurufocus.com, 38. www.investing.com, 39. www.investing.com, 40. markets.businessinsider.com, 41. stockinvest.us, 42. stockanalysis.com, 43. www.marketbeat.com, 44. public.com, 45. stockanalysis.com, 46. www.investing.com, 47. www.quiverquant.com, 48. www.marketscreener.com, 49. www.marketscreener.com
