Updated: December 5, 2025
Parsons Corporation (NYSE: PSN) is having one of its most volatile trading days since going public. After months of anticipation, the U.S. Federal Aviation Administration (FAA) chose rival Peraton—not Parsons—as the prime integrator for the massive “Brand New Air Traffic Control System” (BNATCS) overhaul.
In late‑morning trading on Friday, December 5, 2025, Parsons stock was changing hands around $64 per share, down roughly 24% from Thursday’s close of $84.46, putting the name firmly among the day’s biggest decliners. [1]
Yet, on the same day, Parsons announced it had been selected for a $3.5 billion Defense Threat Reduction Agency (DTRA) contract vehicle, adding to a string of recent defense and infrastructure wins. [2]
Here’s a deep dive into what changed on December 5, how the contract drama fits into the broader fundamentals, and what Wall Street’s latest forecasts suggest for PSN stock from here.
1. Why Parsons Stock Crashed: Losing the FAA’s BNATCS Mega‑Program
A “winner‑take‑most” contract goes to Peraton
After months of headlines positioning Parsons as one of just two finalists for the FAA’s BNATCS modernization—the other being Peraton—the U.S. Department of Transportation (DOT) announced Peraton as the prime integrator for the new system. [3]
Key points on the BNATCS program:
- Initial funding: Congress has allocated $12.5 billion to kick‑start the overhaul. [4]
- Total program scale: The broader modernization effort is expected to reach roughly $31.5–32.5 billion over time, including radar, software, hardware, and telecom upgrades across the U.S. National Airspace System. [5]
- Timeline: The goal is to deliver a new, fully modernized air traffic control system by 2028. [6]
Politico, Reuters, and industry outlets had previously highlighted the Parsons vs. Peraton “two‑horse race,” raising investor expectations that a win could underpin years of high‑margin, program‑management revenue for Parsons. [7]
Instead, Peraton walked away with the prime role. Parsons can still pursue subcontract work, but the market had clearly priced in a chance at the top slot.
Market reaction: repricing a lost optionality
- Benzinga and other outlets framed Friday’s move as Parsons stock “tanking” on the BNATCS loss, with the shares down more than 20% intraday. [8]
- GuruFocus reported an intraday decline of around 21% to the mid‑$60s, noting the move comes despite a still‑solid balance sheet and strong profitability metrics. [9]
The sell‑off is less about immediate earnings and more about removing a huge upside scenario that many analysts had been modeling—explicitly or implicitly—as BNATCS moved toward award.
2. Offsetting Good News: A $3.5 Billion DTRA Contract Vehicle
On the same day the market punished PSN for losing BNATCS, Parsons announced it had been selected for a Cooperative Threat Reduction Integration Contract IV (CTRIC IV) award from the Defense Threat Reduction Agency. [10]
Key details:
- Contract type: Indefinite‑Delivery, Indefinite‑Quantity (IDIQ) multiple‑award contract.
- Ceiling value: $3.5 billion across all awardees. [11]
- Period of performance:
- 5‑year base period
- Single 5‑year option period
- Mission: Task orders will focus on reducing chemical, biological, radiological, and nuclear (CBRN) threats worldwide, including eliminating or securing weapons‑related materials and helping partner nations build counter‑proliferation capabilities. [12]
Parsons has already worked on the prior CTRIC III vehicle and previously secured multiple task orders there, so the firm is not starting from scratch. [13]
The nuance for investors:
- The $3.5 billion is a ceiling, not guaranteed revenue. Parsons will compete for individual task orders against other awardees.
- Still, the award extends a long‑running, high‑priority mission area and supports the company’s positioning in weapons‑of‑mass‑destruction (WMD) reduction and national security infrastructure—areas likely to remain funded regardless of political cycles. [14]
3. Recent Contract Momentum: Indo‑Pacific, Coast Guard, and More
The DTRA win joins a string of sizeable contract developments over the last month:
- Pacific Deterrence Initiative (PDI) MACC
Parsons was awarded a position on a $15 billion Pacific Deterrence Initiative infrastructure multiple‑award construction contract. The vehicle will fund military and infrastructure projects across the Indo‑Pacific, a key strategic priority for the U.S. and its allies. [15] - U.S. Coast Guard biometrics modernization
The company also secured an IDIQ contract to modernize the Coast Guard’s “Biometrics at Sea” system, providing personnel and technical expertise across hardware and software. [16] - Other defense and infrastructure awards
Q3 and early Q4 have included several large orders over $100 million in both defense and critical infrastructure, including ammunition plant work and Middle East security projects. [17]
Taken together, Parsons has been stacking new contract vehicles and long‑dated frameworks. BNATCS was the flashiest opportunity, but the broader contract base is deeper and more diverse today than a year ago.
4. Q3 2025: Earnings Beat, Revenue Miss, Record Backlog
Friday’s drama is landing on top of mixed but generally solid Q3 2025 results that Parsons reported on November 5.
Headline numbers
According to the company’s Q3 press materials and independent summaries: [18]
- Revenue: About $1.6 billion, down 10% year‑over‑year, and down 14% on an organic basis.
- Ex‑“confidential contract”: Adjusting for a large classified program that is winding down, revenue would have grown around 14% (9% organically), driven by critical infrastructure, transportation, urban development, and space/missile defense work. [19]
- Net income: About $64 million, down from the prior year. [20]
- GAAP EPS: $0.59 vs. $0.65 a year ago. [21]
- Adjusted EPS: $0.86, down from $0.95 a year ago but well above consensus estimates around the mid‑$0.70s. [22]
- Adjusted EBITDA: $158 million, down 5% YoY, with margin expanding 60 bps to 9.8% thanks to program mix and accretive acquisitions. [23]
Backlog and book‑to‑bill
- Backlog reached about $8.8 billion, the highest level since Parsons’ IPO, with 72% funded. [24]
- Book‑to‑bill (orders vs. revenue) was 1.0x for Q3, continuing a long streak of ≥1.0x since the IPO. [25]
Independent analysis from StockStory notes that while revenue declined in the quarter, the company has delivered around 10% annual revenue growth over the last five years and roughly 13–14% annualized over the last two years, with EPS growing even faster, partly aided by share repurchases. [26]
Guidance tweaks
Parsons trimmed its full‑year 2025 revenue guidance toward $6.4–6.5 billion, a shade below prior expectations and about 1–3% lower than some Street models. Adjusted EBITDA guidance was broadly reiterated around the midpoint. [27]
The takeaway from Q3:
- The headline revenue decline is largely a function of the roll‑off in a single confidential contract.
- Excluding that, the underlying businesses—from cyber and missile defense to transportation and urban infrastructure—continue to grow at a high single‑ to low double‑digit rate, with steady margin expansion. [28]
5. What Wall Street Is Saying About PSN After the Sell‑Off
Fresh rating moves on December 5
The BNATCS decision triggered fast analyst revisions:
- Truist Securities
- Cut its price target from $100 to $90 while maintaining a Buy rating, explicitly citing the FAA contract loss. [29]
- Raymond James
- Downgraded Parsons from Strong Buy to Market Perform, arguing that the stock had been trading at a 35% valuation premium to peers on expectations of winning BNATCS, and that this premium is now likely to compress. [30]
Even after those moves:
- Truist’s new $90 target still implies roughly 40% upside from the mid‑$60s. [31]
- Raymond James stresses that Parsons’ long‑term market positioning remains intact, pointing to opportunities in missile defense, border security, and international infrastructure—even as BNATCS shifts from “near‑term driver” to lost catalyst. [32]
Broader consensus: still positive, but likely in flux
Across multiple aggregators, consensus remains clearly bullish—though much of this data predates today’s drop and some targets are now being revised:
- StockAnalysis:
- Consensus rating: Strong Buy from 13 analysts.
- Average 12‑month price target: $92, with a range of roughly $80–$107. [33]
- MarketBeat:
- Consensus rating: “Moderate Buy” based on 15 analysts (10 Buy, 5 Hold).
- Average target: about $92.8, implying ~44% upside from the low‑$60s price reference used on their page. [34]
- Fintel, Zacks, and others:
- Similar average price targets in the low‑ to mid‑$90s, with lows in the low‑80s and highs near $105–$107. [35]
Independent platforms like StockStory, writing just before the BNATCS news, characterized Parsons as a “reasonable value” high‑quality defense and infrastructure name at around $82 per share, implying even more upside from today’s depressed levels if fundamentals hold. [36]
Important nuance:
Most of these targets were set before the FAA decision became public. Some (Truist, Raymond James) have already adjusted; others may still follow with lower targets in the coming days as BNATCS falls out of their long‑term models.
6. Valuation and Balance Sheet After the Drop
Using the latest real‑time data from StockAnalysis and GuruFocus, Parsons now looks meaningfully cheaper than a week ago—but still not “deep value.”
Current trading metrics (approximate, intraday December 5)
- Share price: around $64. [37]
- Market cap: ~$6.8–7.0 billion. [38]
- TTM EPS: about $2.17. [39]
- Trailing P/E: ~29–31x. [40]
- Forward P/E: ~19x based on 2025 EPS forecasts (~$3.27). [41]
- Price‑to‑sales: roughly 1.1–1.4x. [42]
- Free cash flow yield: around 4–4.5% on a trailing basis. [43]
On the balance‑sheet side:
- Net debt: about $1.0 billion, with debt‑to‑equity around 0.5 and net‑debt‑to‑EBITDA near 1.6x—a level most analysts consider manageable for a government‑services contractor. [44]
- Liquidity: current ratio around 1.6–1.7, indicating comfortable short‑term coverage. [45]
- Financial health scores:
- Altman Z‑Score ~3.5, suggesting low bankruptcy risk.
- Piotroski F‑Score of 7, which is typically seen as a sign of solid fundamentals. [46]
Before BNATCS, Raymond James flagged PSN as trading at the highest multiple among peers, roughly 35% above the group. [47] The post‑crash valuation narrows that gap but likely still reflects a premium for growth, margin expansion, and contract momentum.
7. Forecasts for Revenue and EPS
Street forecasts compiled by StockAnalysis and other aggregators point to a slower top‑line year in 2025, followed by a re‑acceleration:
- Revenue
- EPS
Algorithmic and technical‑analysis‑driven sites (CoinCodex, Intellectia and others) generally projected PSN trading in the high‑$70s to mid‑$80s range for 2025 before today’s news. Those models tend to lag big, event‑driven changes and should be treated as rough, mechanical projections rather than investment advice. [54]
8. Institutional Positioning: Mixed Signals, Heavy Ownership
Recent 13F filings show very high institutional ownership and a mix of funds adding and trimming positions:
- Channing Capital Management boosted its stake by 20.3% in Q2, making Parsons its fourth‑largest holding at about 1.2% of PSN’s shares. [55]
- TradeLink Capital initiated a new position worth roughly $318,000. [56]
- Neo Ivy Capital Management cut its stake by about 34.9% in Q2. [57]
MarketBeat’s summaries estimate that around 98% of Parsons’ shares are held by institutions and hedge funds, highlighting how much of the float sits in professional hands. [58]
Heavy institutional ownership can amplify both upside and downside moves: when expectations change—like today’s BNATCS disappointment—re‑rating can be swift.
9. Key Risks and Catalysts to Watch
From an investor’s perspective, December 5 reshapes, but doesn’t erase, the Parsons investment thesis.
Main risks
- Contract concentration and win/loss volatility
- BNATCS shows how a single mega‑award can dramatically swing market expectations. Future large pursuits—missile defense, major infrastructure frameworks, classified programs—carry similar binary risk.
- Dependence on government budgets
- Parsons is heavily tied to U.S. federal spending in defense, intelligence, and infrastructure. Shifts in priorities, Congress’ budget cycles, or a change in administration could affect growth rates. [59]
- Valuation risk
- Even after the drop, Parsons still trades at a premium multiple to many traditional defense primes, though more in line with higher‑growth government IT and infrastructure peers. If growth undershoots forecasts, that premium could compress further. [60]
- Backlog dynamics
- StockStory notes that backlog growth over the last two years has lagged revenue growth, raising questions about how sustainable current growth rates are without continued big wins. [61]
Potential catalysts
- Task orders under CTRIC IV and PDI
- Watch how quickly Parsons converts its DTRA and PDI positions into funded task orders and revenue. Early, large awards could partially offset BNATCS disappointment. [62]
- Future large‑scale wins
- Raymond James still sees Parsons as well‑positioned for areas like missile defense, border security, and Middle East infrastructure, any of which could produce the next big upside surprise. [63]
- Margin and cash‑flow execution
- Continued EBITDA margin expansion above 10% and free‑cash‑flow margins in the mid‑single digits or better would support the idea that Parsons can grow earnings faster than revenue, even in a slower top‑line environment. [64]
- Further analyst revisions
- As more firms digest the BNATCS outcome and update their models, consensus targets and ratings could either stabilize (if BNATCS was largely “value optionality”) or drift lower (if it was central to long‑term growth assumptions). Short‑term sentiment will likely track these updates. [65]
10. Bottom Line: A Sharp Re‑Rating, Not a Broken Business
As of December 5, 2025, Parsons Corporation’s story is less about a broken business and more about a broken narrative around one enormous contract.
- The FAA BNATCS loss removes a marquee growth option and forces a valuation reset.
- At the same time, Parsons is adding new long‑term vehicles—DTRA CTRIC IV, Pacific Deterrence Initiative, and U.S. Coast Guard biometrics—that reinforce its role in defense, security, and critical infrastructure. [66]
- Q3 results show earnings resilience, expanding margins, and record backlog, albeit with headline revenue noise from a confidential contract wind‑down. [67]
- Wall Street, while trimming price targets and downgrading the rating at some firms, still generally expects double‑digit percentage upside over the next 12 months from today’s depressed price—though those forecasts remain subject to further revision as the dust settles. [68]
For prospective or current investors, PSN on December 5 is a higher‑volatility, event‑driven situation: the business fundamentals remain relatively strong, but a key upside scenario has been taken off the table.
Nothing here is investment advice, but the updated picture is clear: Parsons has traded in one giant, headline‑grabbing FAA bet for a more diversified—if less spectacular—portfolio of defense and infrastructure contracts. Whether that portfolio justifies today’s valuation will depend on how quickly management converts backlog and contract vehicles into high‑margin, cash‑generating work over the next few years.
References
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