PSN gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 87 industry peers in the Professional Services industry. PSN has an average financial health and profitability rating. PSN is quite expensive at the moment. It does show a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

PSN had positive earnings in the past year.
PSN had a positive operating cash flow in the past year.
Each year in the past 5 years PSN has been profitable.
Each year in the past 5 years PSN had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 6.74%, PSN is in the better half of the industry, outperforming 65.52% of the companies in the same industry.
The Return On Equity of PSN (15.12%) is better than 67.82% of its industry peers.
PSN has a Return On Invested Capital of 7.82%. This is comparable to the rest of the industry: PSN outperforms 57.47% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PSN is below the industry average of 11.85%.
The 3 year average ROIC (6.99%) for PSN is below the current ROIC(7.82%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	6.74%
ROE	15.12%
ROIC	7.82%

ROA(3y)3.31%

ROA(5y)2.82%

ROE(3y)7.17%

ROE(5y)6.06%

ROIC(3y)6.99%

ROIC(5y)5.59%

1.3 Margins

Looking at the Profit Margin, with a value of 5.96%, PSN is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
In the last couple of years the Profit Margin of PSN has grown nicely.
PSN has a Operating Margin of 6.33%. This is comparable to the rest of the industry: PSN outperforms 55.17% of its industry peers.
PSN's Operating Margin has improved in the last couple of years.
PSN has a Gross Margin of 22.05%. This is in the lower half of the industry: PSN underperforms 66.67% of its industry peers.
In the last couple of years the Gross Margin of PSN has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	6.33%
PM (TTM)	5.96%
GM	22.05%

OM growth 3Y36.86%

OM growth 5Y34.23%

PM growth 3Y25.75%

PM growth 5Y2.71%

GM growth 3Y-3.65%

GM growth 5Y-0.19%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

PSN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
PSN has more shares outstanding than it did 1 year ago.
PSN has more shares outstanding than it did 5 years ago.
PSN has a worse debt/assets ratio than last year.

2.2 Solvency

PSN has an Altman-Z score of 3.20. This indicates that PSN is financially healthy and has little risk of bankruptcy at the moment.
PSN's Altman-Z score of 3.20 is fine compared to the rest of the industry. PSN outperforms 60.92% of its industry peers.
PSN has a debt to FCF ratio of 3.26. This is a good value and a sign of high solvency as PSN would need 3.26 years to pay back of all of its debts.
The Debt to FCF ratio of PSN (3.26) is better than 68.97% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that PSN is not too dependend on debt financing.
PSN's Debt to Equity ratio of 0.49 is in line compared to the rest of the industry. PSN outperforms 47.13% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.49
Debt/FCF	3.26
Altman-Z	3.2

ROIC/WACC0.96

WACC8.15%

2.3 Liquidity

PSN has a Current Ratio of 1.67. This is a normal value and indicates that PSN is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of PSN (1.67) is comparable to the rest of the industry.
PSN has a Quick Ratio of 1.67. This is a normal value and indicates that PSN is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.67, PSN is in line with its industry, outperforming 59.77% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.67
Quick Ratio	1.67

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

PSN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.63%.
PSN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.84% yearly.
Looking at the last year, PSN shows a decrease in Revenue. The Revenue has decreased by -0.24% in the last year.
PSN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.29% yearly.

EPS 1Y (TTM)0.63%

EPS 3Y32.68%

EPS 5Y13.84%

EPS Q2Q%-9.47%

Revenue 1Y (TTM)-0.24%

Revenue growth 3Y22.63%

Revenue growth 5Y11.29%

Sales Q2Q%-10.41%

3.2 Future

The Earnings Per Share is expected to grow by 5.75% on average over the next years.
Based on estimates for the next years, PSN will show a small growth in Revenue. The Revenue will grow by 2.10% on average per year.

EPS Next Y-0.71%

EPS Next 2Y2.21%

EPS Next 3Y5.75%

EPS Next 5YN/A

Revenue Next Year-5.07%

Revenue Next 2Y-0.82%

Revenue Next 3Y2.1%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 22.04, which indicates a rather expensive current valuation of PSN.
The rest of the industry has a similar Price/Earnings ratio as PSN.
Compared to an average S&P500 Price/Earnings ratio of 27.25, PSN is valued at the same level.
PSN is valuated rather expensively with a Price/Forward Earnings ratio of 20.64.
PSN's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, PSN is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	22.04
Fwd PE	20.64

4.2 Price Multiples

PSN's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PSN indicates a somewhat cheap valuation: PSN is cheaper than 70.11% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	19.62
EV/EBITDA	16.4

4.3 Compensation for Growth

PSN has a very decent profitability rating, which may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)1.59

EPS Next 2Y2.21%

EPS Next 3Y5.75%

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5. Dividend

5.1 Amount

No dividends for PSN!.

		Industry Rank	Sector Rank
Dividend Yield	0%

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PARSONS CORP / PSN FAQ

What is the ChartMill fundamental rating of PARSONS CORP (PSN) stock?

ChartMill assigns a fundamental rating of 4 / 10 to PSN.

What is the valuation status of PARSONS CORP (PSN) stock?

ChartMill assigns a valuation rating of 3 / 10 to PARSONS CORP (PSN). This can be considered as Overvalued.

Can you provide the profitability details for PARSONS CORP?

PARSONS CORP (PSN) has a profitability rating of 6 / 10.

What is the expected EPS growth for PARSONS CORP (PSN) stock?

The Earnings per Share (EPS) of PARSONS CORP (PSN) is expected to decline by -0.71% in the next year.

Is the dividend of PARSONS CORP sustainable?

The dividend rating of PARSONS CORP (PSN) is 0 / 10 and the dividend payout ratio is 0%.