We assign a fundamental rating of 4 out of 10 to PSN. PSN was compared to 87 industry peers in the Professional Services industry. PSN has only an average score on both its financial health and profitability. PSN is valied quite expensively at the moment, while it does show a decent growth rate.

Quickly go to:

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.
In the past 5 years PSN always reported a positive cash flow from operatings.

1.2 Ratios

PSN has a Return On Assets of 6.74%. This is in the better half of the industry: PSN outperforms 65.52% of its industry peers.
With a decent Return On Equity value of 15.12%, PSN is doing good in the industry, outperforming 67.82% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.82%, PSN is in line with its industry, outperforming 57.47% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PSN is below the industry average of 11.85%.
The last Return On Invested Capital (7.82%) for PSN is above the 3 year average (6.99%), which is a sign of increasing profitability.

		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

The Profit Margin of PSN (5.96%) is better than 66.67% of its industry peers.
PSN's Profit Margin has improved in the last couple of years.
PSN has a Operating Margin (6.33%) which is comparable to the rest of the industry.
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.
PSN's Gross Margin has been stable in the last couple of years.

		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.
Compared to 1 year ago, PSN has more shares outstanding
Compared to 5 years ago, PSN has more shares outstanding
PSN has a worse debt/assets ratio than last year.

2.2 Solvency

PSN has an Altman-Z score of 3.16. This indicates that PSN is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PSN (3.16) is better than 60.92% of its industry peers.
The Debt to FCF ratio of PSN is 3.26, which is a good value as it means it would take PSN, 3.26 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.26, PSN is in the better half of the industry, outperforming 68.97% of the companies in the same industry.
PSN has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.49, PSN is in line with its industry, outperforming 47.13% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.49
Debt/FCF	3.26
Altman-Z	3.16

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.
Looking at the Current ratio, with a value of 1.67, PSN is in line with its industry, outperforming 59.77% of the companies in the same industry.
A Quick Ratio of 1.67 indicates that PSN should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.67, PSN perfoms like the industry average, 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

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 0.63% over the past year.
Measured over the past years, PSN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.84% on average per year.
The Revenue has decreased by -0.24% in the past year.
Measured over the past years, PSN shows a quite strong growth in Revenue. The Revenue has been growing by 11.29% on average per year.

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.
PSN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.10% yearly.

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.
PSN's Price/Earnings ratio is in line with the industry average.
PSN's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.25.
Based on the Price/Forward Earnings ratio of 20.64, the valuation of PSN can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PSN is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of PSN to the average of the S&P500 Index (25.98), we can say PSN is valued slightly 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	15.95

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

PSN does not give a dividend.

		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%.