A Record Backlog and Rising Margins Haven't Stopped Parsons' Nearly 40% Slide

Impact · against what's priced in

Parsons Corp faces a fundamental valuation reset as the loss of a $12.5 billion FAA contract and the wind-down of a Department of State contract create a long-term revenue void. While record margins and a $9.3 billion backlog provide some operational floor, these are insufficient to offset the structural blow to growth expectations and increasing liquidity risks from strained working capital.

PSN−0.40

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In context

The loss of a $12.5 billion FAA contract and the expiration of a confidential Department of State contract fundamentally impair long-term revenue growth, which is not fully offset by a record $9.3 billion backlog or record Q1 margins. Additionally, the increase in net days sales outstanding from 58 to 72 days introduces new liquidity risk.

• aerospace
• infrastructure
• PSN
• cybersecurity
• defense
• federal spending
• government contracts
• middle east
• profit margins

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