PSN
Parsons Corporation
$56.62
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 23.9% below fair value
You pay
$56.62
Bear
$52.50
Fair
$74.38
Bull
$95.95
Bear
$52.50
-7.3%
6% stage 1 growth, 11% discount
Fair
$74.38
+31.4%
10% stage 1 growth, 11% discount
Bull
$95.95
+69.5%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
17.2x
Market is pricing in (growth)
7.0%
vs 10.2% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $74.33 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $74.38 per share.
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