Infrastructure and defense services provider Parsons (NYSE:PSN) will be reporting earnings tomorrow morning. Here’s what investors should know.
Parsons beat analysts’ revenue expectations by 10.7% last quarter, reporting revenues of $1.81 billion, up 27.6% year on year. It was an exceptional quarter for the company, with a solid beat of analysts’ EBITDA estimates.
Is Parsons a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Parsons’s revenue to grow 17.6% year on year to $1.76 billion, slowing from the 35.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.91 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Parsons has missed Wall Street’s revenue estimates three times over the last two years.
Looking at Parsons’s peers in the defense contractors segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Mercury Systems delivered year-on-year revenue growth of 13%, beating analysts’ expectations by 23.9%, and CACI reported revenues up 14.5%, topping estimates by 3.4%. Mercury Systems traded up 18.3% following the results while CACI was down 9.3%.
Read our full analysis of Mercury Systems’s results here and CACI’s results here.
Stocks generally had a good 2024. The Fed fought high inflation and won without sending the economy into a recession, otherwise lovingly known as a soft landing. The US Central Band is now cutting rates. That, plus the election of Donald Trump in November 2024, sent markets even higher, and while some of the defense contractor stocks have shown solid performance, the group has generally underperformed, with share prices down 4.5% on average over the last month. Parsons is down 22.6% during the same time and is heading into earnings with an average analyst price target of $115.31 (compared to the current share price of $74.68).
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
