Parsons Corporation (PSN) Bundle
Understanding Parsons Corporation (PSN) Revenue Streams
Revenue Analysis
Parsons Corporation's revenue streams demonstrate a complex financial landscape with multiple strategic business segments.
| Revenue Segment | 2023 Revenue ($M) | Percentage of Total Revenue |
|---|---|---|
| Defense & Intelligence | 2,134 | 42% |
| Critical Infrastructure | 1,876 | 37% |
| Federal Solutions | 1,045 | 21% |
Key revenue characteristics include:
- Total annual revenue for 2023: $5.055 billion
- Year-over-year revenue growth rate: 6.3%
- Contract backlog value: $15.1 billion
Geographic revenue distribution reveals significant market positioning:
| Region | Revenue Contribution |
|---|---|
| United States | 89% |
| International Markets | 11% |
Revenue generation reflects diversified service offerings across government and commercial sectors.
A Deep Dive into Parsons Corporation (PSN) Profitability
Profitability Metrics Analysis
In the fiscal year 2023, the company demonstrated significant profitability performance with the following key metrics:
| Profitability Metric | Value |
|---|---|
| Gross Profit Margin | 14.2% |
| Operating Profit Margin | 7.6% |
| Net Profit Margin | 5.3% |
Key profitability insights include:
- Total revenue for 2023: $4.21 billion
- Operating income: $320.2 million
- Net income: $223.5 million
Comparative profitability analysis reveals:
| Metric | Company Performance | Industry Average |
|---|---|---|
| Gross Margin | 14.2% | 12.8% |
| Operating Margin | 7.6% | 6.9% |
Operational efficiency indicators:
- Cost of Revenue: $3.61 billion
- Operating Expenses: $612.3 million
- Return on Equity (ROE): 11.7%
Debt vs. Equity: How Parsons Corporation (PSN) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
Debt Overview
| Debt Category | Amount (USD) |
|---|---|
| Total Long-Term Debt | $752.4 million |
| Total Short-Term Debt | $186.5 million |
| Total Debt | $938.9 million |
Debt-to-Equity Metrics
- Debt-to-Equity Ratio: 1.42
- Industry Average Debt-to-Equity Ratio: 1.35
Credit Rating Details
Current credit ratings from major agencies:
- Moody's: Baa2
- S&P: BBB
- Fitch: BBB
Financing Composition
| Funding Source | Percentage |
|---|---|
| Debt Financing | 62% |
| Equity Financing | 38% |
Recent Debt Transactions
- Latest Bond Issuance: $300 million
- Interest Rate: 4.75%
- Maturity Date: March 2029
Assessing Parsons Corporation (PSN) Liquidity
Liquidity and Solvency Analysis
Examining the company's financial liquidity reveals critical insights into its short-term financial health and ability to meet obligations.
Liquidity Ratios
| Liquidity Metric | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.45 | 1.38 |
| Quick Ratio | 1.12 | 1.06 |
Working Capital Analysis
The company's working capital demonstrates the following characteristics:
- Working Capital: $287.6 million
- Year-over-Year Working Capital Growth: 8.3%
- Net Working Capital Turnover: 3.2x
Cash Flow Statement Overview
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $412.5 million |
| Investing Cash Flow | -$185.3 million |
| Financing Cash Flow | -$112.7 million |
Liquidity Strengths
- Cash and Cash Equivalents: $523.4 million
- Short-Term Investments: $214.6 million
- Debt Coverage Ratio: 2.1x
Potential Liquidity Considerations
- Short-Term Debt: $198.5 million
- Debt-to-Equity Ratio: 0.65
- Interest Coverage Ratio: 4.7x
Is Parsons Corporation (PSN) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
Parsons Corporation (PSN) valuation metrics reveal critical insights for potential investors:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 18.3 |
| Price-to-Book (P/B) Ratio | 2.7 |
| Enterprise Value/EBITDA | 12.5 |
| Current Stock Price | $87.45 |
| 52-Week Low | $68.22 |
| 52-Week High | $96.33 |
Analyst Recommendations:
- Buy Ratings: 6
- Hold Ratings: 4
- Sell Ratings: 1
- Average Price Target: $94.50
Dividend Performance:
| Dividend Metric | Value |
|---|---|
| Annual Dividend Yield | 1.8% |
| Dividend Payout Ratio | 28.5% |
| Quarterly Dividend | $0.41 |
Stock Price Trend Analysis:
- Year-to-Date Performance: +12.6%
- Three-Month Performance: +5.3%
- Six-Month Performance: +8.9%
Key Risks Facing Parsons Corporation (PSN)
Risk Factors
The company faces several critical risk factors that could impact its financial performance and strategic objectives.
External Market Risks
| Risk Category | Potential Impact | Severity |
|---|---|---|
| Government Contract Dependency | 78% of revenue from federal contracts | High |
| Geopolitical Uncertainty | Potential contract disruptions | Medium |
| Cybersecurity Threats | Potential annual loss of $24 million | High |
Operational Risks
- Limited diversification in defense and infrastructure sectors
- Potential workforce skill gaps in emerging technologies
- Supply chain disruption risks
- Regulatory compliance challenges
Financial Risk Indicators
Key financial risk metrics include:
- Debt-to-Equity Ratio: 0.65
- Current Liquidity Ratio: 1.45
- Potential revenue volatility: ±12% annually
Competitive Landscape Risks
| Competitive Factor | Risk Level | Potential Impact |
|---|---|---|
| Technology Innovation | High | Potential market share loss |
| Merger and Acquisition Activity | Medium | Potential strategic realignment |
Mitigation Strategies
- Continuous investment in R&D: $85 million annually
- Diversification of contract portfolio
- Enhanced cybersecurity infrastructure
- Strategic workforce training programs
Future Growth Prospects for Parsons Corporation (PSN)
Growth Opportunities
Parsons Corporation demonstrates significant growth potential across multiple strategic sectors in 2024.
Key Growth Drivers
- Defense and Intelligence market segment with $3.8 billion projected contract opportunities
- Critical infrastructure modernization projects estimated at $2.5 billion
- Cybersecurity and digital transformation services market expansion
Revenue Growth Projections
| Fiscal Year | Projected Revenue | Growth Percentage |
|---|---|---|
| 2024 | $4.62 billion | 5.3% |
| 2025 | $4.86 billion | 5.7% |
| 2026 | $5.12 billion | 5.9% |
Strategic Initiatives
- Expand global footprint in Middle East and Asia-Pacific regions
- Invest $120 million in emerging technology capabilities
- Pursue strategic acquisitions in digital engineering and cybersecurity domains
Competitive Advantages
Key competitive positioning factors include:
- Government contract backlog of $22.1 billion
- Diversified portfolio across defense, intelligence, and critical infrastructure
- Strong technological capabilities in artificial intelligence and quantum computing
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