Parsons Corporation (PSN) Stock Plunges After FAA Contract Loss: December 5, 2025 News, Forecasts and Investor Outlook

Updated: December 6, 2025

Parsons Corporation (NYSE: PSN), a U.S. defense and infrastructure engineering firm, saw its stock price collapse on Friday, December 5, 2025, after the company unexpectedly lost a multibillion‑dollar Federal Aviation Administration (FAA) air traffic control contract to rival Peraton. The sell‑off came despite Parsons announcing several major defense and infrastructure wins the same day, leaving investors to weigh a sharp setback against a still‑strong long‑term pipeline. ^[1]

Below is a comprehensive look at the latest news, forecasts and analyses around Parsons Corporation stock from December 5, 2025 onward.

1. How Parsons Stock Traded on December 5, 2025

Closing price: About $66.65 per share on December 5.
Change on the day: Down roughly 21% from the prior close near $84.47.
Intraday low: Around $62.33, meaning the stock briefly traded more than 26% below Thursday’s close.
Volume: Over 11.6 million shares, far above typical daily trading activity, underscoring a capitulation‑style sell‑off.

Multiple real‑time market reports described Parsons as being on track for its worst single‑day percentage decline on record, with the stock down more than 25% at points in the session as investors digested the FAA news. ^[2]

Even before Friday’s collapse, Parsons shares had already been under pressure. One intraday update noted the company was down roughly 28% year‑to‑date and trading more than 30% below its 52‑week high near $99. ^[3]

2. The Catalyst: FAA Picks Peraton Over Parsons for $12.5 Billion Air Traffic Control Overhaul

The core trigger for the sell‑off was a decision by the FAA to select Peraton, a private national security and technology firm, as the project manager for a $12.5 billion modernization of the U.S. air traffic control system. ^[4]

Key details:

The contract is part of a broader multi‑year, multibillion‑dollar effort to upgrade aging air traffic control infrastructure and communications across the U.S. ^[5]
Peraton was chosen over a joint bid from Parsons and IBM, one of only a small number of finalists confirmed earlier in the process. ^[6]
The FAA and Department of Transportation framed the award as a “first‑of‑its‑kind” contract, designed to incentivize on‑time, on‑budget delivery of critical infrastructure upgrades. ^[7]

Markets had largely assumed Parsons would win this program (often referred to in coverage as the BNATCS—Brand New Air Traffic Control System—effort). Several trading notes and news digests on Friday called the outcome a “surprise” that removed a major expected catalyst for the company’s growth profile in 2026–2028. ^[8]

That combination—high expectations baked into the share price and a binary, negative outcome—helps explain why PSN sold off so aggressively despite otherwise supportive fundamentals.

3. Offsetting Good News: $3.5B DTRA Win and New Infrastructure Contracts

Ironically, December 5 was also one of Parsons’ most contract‑rich days of the year.

3.1. DTRA CTRIC IV: Up to $3.5 Billion for Threat Reduction

Parsons announced it had been selected by the Defense Threat Reduction Agency (DTRA) as an awardee on the Cooperative Threat Reduction Integration Contract (CTRIC) IV: ^[9]

Contract type: Indefinite‑delivery, indefinite‑quantity (IDIQ) multiple‑award task order contract.
Ceiling value:$3.5 billion.
Duration:5‑year base period plus a 5‑year option, for a potential 10‑year performance window.
Scope: Tasks include eliminating, securing or consolidating weapons of mass destruction (WMD) materials and infrastructure, and helping partner nations bolster their ability to detect and prevent illicit trafficking.

CTRIC IV does not represent guaranteed revenue—Parsons must still compete for and win task orders—but it gives the company a long runway of opportunities in a mission area (WMD threat reduction) where it already has deep experience from the earlier CTRIC III vehicle. ^[10]

3.2. Sound Transit MATOC: Share of a $1 Billion Design Program

In the infrastructure arena, Parsons disclosed that it had secured a position on Sound Transit’s 2025 $1 billion ceiling Multiple Award Task Order Contract (MATOC) for design services in the Seattle region. ^[11]

The MATOC runs for five years with two potential one‑year extensions.
The work supports Sound Transit’s estimated $60 billion capital program, one of the largest transportation build‑outs in North America, including light rail extensions and state‑of‑good‑repair and resiliency projects. ^[12]

3.3. Missouri I‑70 Project: Lead Designer on a $441 Million Highway Job

Parsons also announced that it was selected as lead designer on the Interstate 70 Rocheport to Columbia design‑build project in Missouri: ^[13]

Project value: About $441 million.
The project will reconstruct and improve a heavily traveled stretch of I‑70, adding to Parsons’ transportation portfolio in the U.S. heartland.

Together with Parsons’ earlier award of a position on the $15 billion Pacific Deterrence Initiative (PDI) infrastructure contract in November, these wins underscore the company’s ability to land large, multi‑year vehicles even as it loses one especially high‑profile FAA opportunity. ^[14]

4. Recent Fundamentals: Q3 2025 Earnings Show Mixed Picture but Strong Backlog

Before the December 5 contract shock, Parsons’ third‑quarter 2025 results had already set the stage for a nuanced investment debate.

4.1. Revenue and Earnings

For Q3 2025, Parsons reported:

Revenue: About $1.62 billion, down 10% year‑over‑year, and down 14% on an organic basis, largely due to a major classified (“confidential”) program rolling off. ^[15]
GAAP diluted EPS:$0.59, compared with $0.65 in the prior‑year quarter. ^[16]
Adjusted EBITDA: Roughly $158 million, down 5% year‑over‑year, but with margin expanding about 60 basis points to 9.8%. ^[17]

Analysts generally viewed this as a “mixed” quarter: earnings and margins were better than expected, but revenue missed consensus due to the confidential contract roll‑off and some timing issues on federal awards. ^[18]

4.2. Backlog, Book‑to‑Bill and Cash Flow

The more encouraging part of the Q3 update came from Parsons’ forward indicators:

Total backlog: About $8.8 billion, up slightly year‑over‑year and the highest funded backlog level since the company’s 2019 IPO. ^[19]
Funded backlog: Approximately $6.4 billion, representing about 72% of total backlog. ^[20]
Book‑to‑bill ratio: Around 1.0x for the quarter and trailing twelve months, meaning new awards kept pace with revenues. ^[21]
Operating cash flow: Roughly $163 million in Q3, supporting strong free‑cash‑flow conversion and a net leverage ratio near 1.4–1.6x EBITDA—considered manageable for this type of contractor. ^[22]

4.3. Segment Trends

Segment performance underscores the internal cross‑currents:

Critical Infrastructure revenue rose about 18% (13% organically), with adjusted EBITDA up over 80% and margins expanding above 10%. ^[23]
Federal Solutions revenue dropped roughly 29%, driven by the confidential contract’s decline; however, excluding that single program, the segment would have posted mid‑single‑digit organic growth. ^[24]

Management trimmed full‑year 2025 revenue guidance to the $6.4–$6.5 billion range but reiterated adjusted EBITDA and cash‑flow targets, highlighting continued margin expansion despite the top‑line noise. ^[25]

5. Analyst Reactions: Target Cuts but Ratings Still Skew Bullish

Friday’s FAA decision forced Wall Street to re‑run its models in real time, producing a wave of commentary and at least one high‑profile downgrade.

5.1. December 5 Moves

According to aggregated analyst summaries and market reports as of December 5: TechStock²+2StockAnalysis+2

Raymond James downgraded Parsons from “Strong Buy” to “Market Perform”, a two‑notch move explicitly tied to the FAA loss and a view that the stock’s prior valuation premium depended on that win.
Truist Securities cut its 12‑month price target from $100 to $90 but maintained a Buy/Strong Buy rating, noting that even after the reduction, the new target still implied mid‑30% upside from the mid‑$60s.
Some commentary flagged a shift by Mizuho toward a more cautious stance (Hold), reflecting the removal of a major upside scenario in the out‑years.

These reactions reflect a “narrative reset”, not a wholesale abandonment of the stock: the big FAA contract is gone, but the core business, backlog and contract pipeline remain intact.

5.2. Consensus Ratings and Price Targets

Aggregators that track Wall Street forecasts show that, as of the latest updates around December 5:

StockAnalysis.com reports a “Strong Buy” consensus from about 12–13 analysts, with an average price target near $91.17 (low $80, high $107). That implied roughly 35–37% upside from share prices in the mid‑$60s before all estimates were fully updated for the FAA outcome. ^[26]
MarketBeat lists an average 12‑month target of about $91.9 across 15 analysts, with the highest at $107 and the lowest at $80, translating to a similar high‑30% percentage upside from roughly $66–67 per share. ^[27]
A QuiverQuant summary notes a median target around $90 from nine recent analyst reports, again clustered in the $80–$107 range. ^[28]

Importantly, many of these targets were set before the FAA decision, so more cuts and rating changes may follow in the days and weeks ahead. TechStock²

6. Valuation and Fundamental Outlook After the Sell‑Off

6.1. How “Cheap” Is PSN Now?

A synthesis of independent valuation work and data providers on December 5 paints the following picture: TechStock²+2Simply Wall St+2

Share price: Mid‑$60s, down from the mid‑$80s the day before.
Market capitalization: Roughly $6.8–$7.0 billion.
Trailing EPS: Around $2.1–$2.2, implying a trailing P/E in the high‑20s to low‑30s at post‑sell‑off prices.
Forward EPS (2025E): Street forecasts cluster near $3.2–$3.3, giving a forward P/E roughly in the high‑teens to ~20x.
Free‑cash‑flow yield: Roughly 4–4.5% on a trailing basis.
Net leverage: About 1.5x EBITDA, modest for a project‑based contractor.

Prior to the drop, one Simply Wall St analysis estimated Parsons’ “fair value” at about $94.90 per share, suggesting the stock was ~11% undervalued at a then‑price around $84.46 but also flagging that PSN’s P/E of 37.5x sat well above its industry average near 24.8x. ^[29]

After Friday’s sell‑off, that valuation premium has compressed, but given the still‑elevated multiples versus some traditional defense primes, analysts caution that further de‑rating is possible if growth, margins or future bid wins disappoint.

6.2. Revenue and EPS Forecasts

Consensus forecasts compiled by sites such as StockAnalysis and WallStreetZen (still mostly pre‑FAA decision) show a pattern of digestion in 2025 followed by renewed growth: ^[30]

Revenue:
- 2024 (actual/estimate): about $6.7–$6.8 billion.
- 2025: around $6.5 billion, reflecting the confidential contract roll‑off and some award timing.
- 2026: roughly $6.9 billion, a return to mid‑single‑digit growth.
EPS:
- 2024: approximately $2.1–$2.2.
- 2025: around $3.2–$3.3, driven by mix shift, margin expansion and cost leverage.
- 2026: mid‑single‑digit EPS growth off the 2025 base, with some models moving into the $4+ range by year three.

Actual results will depend heavily on how quickly Parsons turns its $8.8 billion backlog and new contract vehicles—CTRIC IV, PDI MACC, Sound Transit’s MATOC, and major transportation projects—into funded task orders and high‑margin revenue. ^[31]

7. Key Risks Highlighted by Recent Coverage

Analysts and market commentators covering Friday’s move repeatedly pointed to a handful of risk factors investors should watch: TechStock²+2Quiver Quantitative+2

Mega‑contract concentration
- The FAA decision shows how losing a single “mega‑program” can erase a large portion of perceived future upside in a single day. Future bids in missile defense, infrastructure or classified domains carry similar binary sentiment risk.
Dependence on government spending
- Parsons’ revenue is heavily tied to U.S. federal budgets and infrastructure programs. Budget fights, shutdowns, or shifting political priorities can delay awards and pressure margins, even when long‑term demand is intact.
Backlog conversion risk
- Vehicles like CTRIC IV, the Pacific Deterrence Initiative infrastructure MACC, and the Sound Transit MATOC are ceilings, not bookings. Parsons must successfully compete for individual task orders and execute them profitably to realize the revenue implied by these headline numbers. ^[32]
Valuation volatility
- Even after the sell‑off, PSN trades closer to high‑growth government IT and infrastructure names than to slower‑growing defense primes. If growth or margins fail to meet expectations—or if more big contracts go to competitors—multiples could compress further. ^[33]
Integration and execution
- Parsons has grown in part through acquisitions. Continued margin expansion assumes smooth integration of acquired businesses and disciplined project execution across a growing global portfolio. ^[34]

8. What to Watch Next for Parsons (PSN)

For investors and observers tracking Parsons Corporation stock after December 5, several upcoming milestones stand out: Investing.com+3TechStock²+3Investing.com+3

Task orders under CTRIC IV and PDI MACC
Watch how quickly DTRA and Pacific theater infrastructure work translate into funded projects and revenue, and whether Parsons can establish itself as a go‑to integrator on those vehicles.
Infrastructure execution
Progress on the Sound Transit program and the I‑70 Rocheport to Columbia design‑build project will be closely monitored, both for revenue and for showcasing Parsons’ capabilities in complex transportation work.
Margin and cash‑flow trends
A key part of the bullish thesis is Parsons’ ability to keep EBITDA margins trending toward or above 10% while generating strong free cash flow—especially important now that investors are re‑rating the growth outlook.
Further analyst revisions
Many price targets still reflect pre‑FAA assumptions. Additional downgrades or target cuts—or, conversely, reiterations of Buy ratings—will signal how quickly the Street is recalibrating its view.
Management commentary at investor conferences and on the next earnings call
Upcoming appearances, including scheduled conferences, will offer clues about how Parsons plans to replace the lost FAA opportunity, prioritize capital allocation, and balance defense versus infrastructure growth. TechStock²+1

9. Bottom Line: One Big Contract Lost, a Broader Pipeline Still Intact

As of December 5, 2025, Parsons Corporation stock is in the middle of a painful reset. The FAA’s choice of Peraton over Parsons and IBM removes a major upside scenario that many investors had assumed was likely, triggering a more than 20% drop in PSN’s share price in a single session. ^[35]

At the same time:

The company has record funded backlog, improving margins and solid cash generation. ^[36]
It just added a 10‑year, $3.5 billion DTRA threat‑reduction vehicle and important positions on multi‑year transit and highway programs. ^[37]
Wall Street’s consensus price targets still sit materially above today’s share price, although further revisions are likely. ^[38]

For now, the market is recalibrating from a story built partly on a single, massive FAA bet to one centered on a more diversified portfolio of long‑dated defense and infrastructure contracts. Whether that trade‑off proves attractive will depend on how effectively Parsons converts its sizable contract pipeline into sustained, high‑margin, cash‑generating growth over the next several years.

As always, this article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Anyone considering PSN stock should carefully evaluate their own objectives, risk tolerance and financial situation, and consult a qualified financial adviser where appropriate.