PSN
Parsons Corporation
$48.64
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 24.4% below fair value
You pay
$48.64
Bear
$50.82
Fair
$64.35
Bull
$76.62
Bear
$50.82
+4.5%
4% stage 1 growth, 11% discount
Fair
$64.35
+32.3%
7% stage 1 growth, 11% discount
Bull
$76.62
+57.5%
9% stage 1 growth, 11% discount
Adjust Assumptions
7.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
13.5x
Market is pricing in (growth)
3.7%
vs 7.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$47.75
Divergence from AlphaVal
35%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $64.35 per share.
Warnings
Wall Street's average price target is $47.75 (from 17 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions