Parsons Corporation (PSN): A Bull Case Theory

We came across a bullish thesis on Parsons Corporation (PSN) on wallstreetbets Subreddit Page by No_Layer2027. In this article, we will summarize the bulls’ thesis on PSN. Parsons Corporation (PSN)'s share was trading at $66.91 as of May 14^th. PSN’s trailing P/E was 28.47 according to Yahoo Finance.

Parsons (PSN), a $7 billion U.S. infrastructure and defense contractor, is poised for a valuation rerating following its inclusion in a major $243 billion U.S.–Qatar commercial agreement, disclosed by the White House on May 14. Parsons is participating in 30 projects valued at up to $97 billion, and while exact revenue contribution is still unclear, even modest realization—around 10–15%—would significantly boost its growth and backlog. Despite this potential, the market remains hesitant, waiting for concrete updates on project monetization, which has led to a pricing disconnect.

Currently trading at ~9x forward EV/EBITDA, well below peers like KBR, AECOM, and Jacobs at 11.5x–12.5x, Parsons appears undervalued, particularly given its strong fundamentals. The company recently reported record backlog of $9.1 billion and a 67% YoY increase in net income, reflecting expanding margins and improved execution. Its exposure to high-barrier sectors like cybersecurity, missile defense, transportation, and water infrastructure—driven by resilient government demand—positions it for long-term, high-visibility growth.

Should Qatar contributions be confirmed and integrated into financial guidance, a rerating to $85–90 per share appears plausible, up from ~$67. Even without factoring in Qatar, applying peer multiples to 2025 EBITDA guidance of $675 million implies a $77–78 valuation, offering 15–20% upside. Parsons’ shares previously reached $112 in late 2023, indicating room for revaluation if sentiment improves. While execution risks and delays in project realization remain, upcoming earnings could act as a catalyst, offering clarity on Qatar-related projects and potentially triggering upward revisions. Overall, PSN offers a rare blend of undervaluation, improving fundamentals, and a transformational catalyst that could materially redefine its growth profile.

Parsons Corporation (PSN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held PSN at the end of the fourth quarter which was 30 in the previous quarter. While we acknowledge the risk and potential of PSN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PSN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.