Why PSN Stock Is Falling Today

Parsons Corp. (PSN) is sinking 9% today after investment bank William Blair cut its rating on the name to Market Perform from Outperform. Parsons sells tech products in the defense, intelligence, and critical infrastructure markets.

Worries About a Contract That May Not Be Renewed

William Blair downgraded PSN due to what the bank sees as “elevated risk” triggered by the “company’s classified humanitarian aid U.S. State Department contract” that is slated to be renewed during the current quarter.

A technician in a lab coat analyzing the performance of a data intelligence service.

The Trump administration may decide not to renew the deal because it could look to cut Washington’s spending on humanitarian aid, William Blair warned. According to the bank, the contract accounts for roughly 10% of PSN’s sales.

Parsons’ Positive Aspects

The company is very well-managed and has benefited from high government infrastructure spending in America and its own initiatives in the Mideast, William Blair stated. Additionally, the demand for the firm’s security offerings has been strong, the bank believes.

More Information About PSN

Analysts on average expect the company’s earnings per share to climb to $3.93 this year from $3.40 in 2024.

In the last month, the shares have dropped 8%, while they have sunk 17.5% in the last three months.

While we acknowledge the potential of PSN, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

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