PSN
Parsons Corporation
$44.15
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 31.0% below fair value
You pay
$44.15
Bear
$50.66
Fair
$64.03
Bull
$76.13
Bear
$50.66
+14.8%
4% stage 1 growth, 11% discount
Fair
$64.03
+45.0%
7% stage 1 growth, 11% discount
Bull
$76.13
+72.4%
9% stage 1 growth, 11% discount
Adjust Assumptions
6.9%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
12.5x
Market is pricing in (growth)
2.5%
vs 6.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$47.75
Divergence from AlphaVal
34%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $64.03 per share.
Warnings
Wall Street's average price target is $47.75 (from 17 analysts). Our estimate is 34% 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