DexCom earnings beat by $0.03, revenue topped estimates
On Tuesday, Benchmark analysts reiterated their Buy rating for Parsons Corp . (NYSE: NYSE:PSN) stock and maintained a price target of $90.00, representing a significant upside from the current price of $64.85. According to InvestingPro data, analyst targets range from $65 to $95, with the company maintaining a GOOD Financial Health Score. The reaffirmation follows the company’s recent announcement regarding a shift in its financial outlook due to uncertainties surrounding a classified contract.
Parsons Corp. disclosed in an 8-K filing on Monday night that the recent reorganization within the Department of State has led to increased uncertainty about a classified contract. Consequently, Parsons has decided to remove this contract from its fiscal year 2025 guidance, as the company cannot accurately predict the contract’s future size and scope.
The revised guidance for Parsons’ adjusted EBITDA for fiscal year 2025 is now projected to be between $590 million and $630 million. This is a reduction from the previous range of $640 million to $710 million. The Street had already anticipated the lower end of the initial guidance, reflecting concerns over the company’s exposure to confidential contracts related to foreign aid.
The classified State Department contracts were noted as significant exposures for Parsons, particularly in light of recent reorganizations under the Trump Administration and related efforts by the Department of Government Ethics (DOGE). Parsons is expected to address these developments and provide additional context at several upcoming conferences.
In other recent news, Parsons Corporation has revised its 2025 financial guidance due to uncertainties surrounding a confidential contract with the Department of State. The company now anticipates total revenue for 2025 to be between $6.45 billion and $6.65 billion, down from the previous estimate of $7 billion to $7.5 billion. Adjusted EBITDA is expected to range from $590 million to $630 million, a decrease from earlier guidance. Meanwhile, Parsons has been selected as one of the lead consultants for the Austin-Bergstrom International Airport expansion project, providing program management services for the initiative. This project aims to enhance airport capacity and operational efficiency over a five to seven-year period.
Additionally, analysts from Raymond (NSE:RYMD) James and William Blair have maintained a Market Perform rating for Parsons stock amid these developments. The removal of the confidential contract from financial projections has raised concerns among investors, with analysts emphasizing the need for clarity on government procurement trends. Recent reports also indicate that the U.S. government is seeking contract cuts from tech firms, including Parsons, as part of a broader strategy to consolidate federal purchasing. This government initiative could introduce additional challenges for the company and the tech sector in 2025.
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