Over the past six months, Parsons’s stock price fell to $60.66. Shareholders have lost 9.5% of their capital, which is disappointing considering the S&P 500 has climbed by 13%. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.
Just because a business is in the green today doesn’t mean it will thrive tomorrow.
While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
Shares of infrastructure and defense services provider Parsons (NYSE:PSN) fell 21.9% in the afternoon session after the company lost out on a significant government contract to upgrade the U.S. air traffic control system.
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Raymond James noted that Peraton's award "will be a major surprise" to Parsons investors, and the development erases "significant" organic upside to 2026 and 2027 estimates.
Parsons Corp exemplifies quality investing with strong financials, high returns on capital, and a focus on critical infrastructure and national security.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
Infrastructure and defense services provider Parsons (NYSE:PSN) missed Wall Street’s revenue expectations in Q3 CY2025, with sales falling 10.4% year on year to $1.62 billion. The company’s full-year revenue guidance of $6.45 billion at the midpoint came in 1.9% below analysts’ estimates. Its non-GAAP profit of $0.86 per share was 14.5% above analysts’ consensus estimates.
