Parsons Corporation (PSN): Among the Worst Performing IT Services Stocks to Buy According to Analysts
Generated by AI AgentWesley Park
Wednesday, Mar 5, 2025 9:25 pm ET1min read
PSN--
Parsons Corporation (PSN) has been a disappointment for investors in the IT services sector, with its stock underperforming compared to its peers. Despite the company's strong financial performance and strategic moves, analysts have been cautious about the stock's prospects. In this article, we will explore the reasons behind Parsons' underperformance and discuss whether it is still a stock worth buying.
Parsons Corporation has made several strategic moves and acquisitions recently, including the acquisition of BCC Engineering and TRS GroupTRS--, which enhanced its infrastructure and environmental capabilities. The company also secured a total of $7.0 billion in contract awards for the fiscal year 2024, up 17% year-over-year. These moves have contributed to Parsons' record financial performance, with revenue growing by 24.03% in 2024 and earnings per share (EPS) increasing by 86.43%.
However, despite these positive developments, Parsons' stock has underperformed compared to other IT services stocks. The company's 3-month performance is -11.81%, compared to the sector average of +1.83%. This underperformance can be attributed to several factors, including the company's lower capitalization, lower sales per employee, lower analyst coverage, and lower forward PE ratio compared to its peers.
Parsons' lower capitalization, at $10.11B, may limit its ability to invest in growth opportunities and make acquisitions. Its lower sales per employee, at $286,460, compared to the sector average of $385,714, may indicate lower operational efficiency. The company's lower analyst coverage, with only 12 analysts covering its stock compared to the sector average of 15, may result in less visibility and less favorable analyst ratings. Finally, Parsons' lower forward PE ratio, at 14.76 compared to the sector average of 18.23, may indicate that the market expects lower future earnings growth for the company.
Despite these challenges, ParsonsPSN-- Corporation remains a strong player in the IT services sector, with a history of consistent double-digit organic growth and robust financial performance. The company's record revenue and net income in 2024, as well as its strong contract awards, demonstrate its ability to execute on its strategic vision.
In conclusion, Parsons Corporation's underperformance compared to other IT services stocks can be attributed to several factors, including its lower capitalization, lower sales per employee, lower analyst coverage, and lower forward PE ratio. However, the company's strong financial performance, strategic moves, and acquisitions demonstrate its ability to execute on its vision and grow its business. While analysts have been cautious about the stock's prospects, Parsons Corporation remains a strong player in the IT services sector, and investors should consider its potential for future growth.
Action Alerts PLUS, which Cramer manages as a charitable trust, is long AAPL.
TRS--
Parsons Corporation (PSN) has been a disappointment for investors in the IT services sector, with its stock underperforming compared to its peers. Despite the company's strong financial performance and strategic moves, analysts have been cautious about the stock's prospects. In this article, we will explore the reasons behind Parsons' underperformance and discuss whether it is still a stock worth buying.
Parsons Corporation has made several strategic moves and acquisitions recently, including the acquisition of BCC Engineering and TRS GroupTRS--, which enhanced its infrastructure and environmental capabilities. The company also secured a total of $7.0 billion in contract awards for the fiscal year 2024, up 17% year-over-year. These moves have contributed to Parsons' record financial performance, with revenue growing by 24.03% in 2024 and earnings per share (EPS) increasing by 86.43%.
However, despite these positive developments, Parsons' stock has underperformed compared to other IT services stocks. The company's 3-month performance is -11.81%, compared to the sector average of +1.83%. This underperformance can be attributed to several factors, including the company's lower capitalization, lower sales per employee, lower analyst coverage, and lower forward PE ratio compared to its peers.
Parsons' lower capitalization, at $10.11B, may limit its ability to invest in growth opportunities and make acquisitions. Its lower sales per employee, at $286,460, compared to the sector average of $385,714, may indicate lower operational efficiency. The company's lower analyst coverage, with only 12 analysts covering its stock compared to the sector average of 15, may result in less visibility and less favorable analyst ratings. Finally, Parsons' lower forward PE ratio, at 14.76 compared to the sector average of 18.23, may indicate that the market expects lower future earnings growth for the company.
Despite these challenges, ParsonsPSN-- Corporation remains a strong player in the IT services sector, with a history of consistent double-digit organic growth and robust financial performance. The company's record revenue and net income in 2024, as well as its strong contract awards, demonstrate its ability to execute on its strategic vision.
In conclusion, Parsons Corporation's underperformance compared to other IT services stocks can be attributed to several factors, including its lower capitalization, lower sales per employee, lower analyst coverage, and lower forward PE ratio. However, the company's strong financial performance, strategic moves, and acquisitions demonstrate its ability to execute on its vision and grow its business. While analysts have been cautious about the stock's prospects, Parsons Corporation remains a strong player in the IT services sector, and investors should consider its potential for future growth.
Action Alerts PLUS, which Cramer manages as a charitable trust, is long AAPL.
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