Bear Of The Day: Parsons (PSN)
Parsons (PSN) is a Zacks Rank #5 (Strong Sell) after recently missing the Zacks Consensus Estimate. The stock has a Zacks Style Score for Value of C and a B for Growth. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Parsons Corporation is a provider of technology-driven solutions. It is focused on the defense, intelligence and critical infrastructure markets. The company offers technical design and engineering services and software which consists of cybersecurity, intelligence, defense, military training, connected communities, physical infrastructure and mobility solutions. Parsons Corporation is based in Centreville, United States.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of Parsons (PSN) I see the company has beaten the Zacks Consensus Estimate in three of the last four quarters. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
The most recent earnings report from PSN saw the company post $0.75 in EPS when the Zacks Consensus Estimate was calling for $0.80. That 5 cent miss translates to a 6.25% negative earnings surprise.
Earnings Estimate Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For Parsons (PSN) I see annual estimates for next year moving lower of late.
The current fiscal year consensus number has slid from $3.51 to $3.33 over the last 60 days.
The next fiscal year has also dropped from $3.95 to $3.70 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
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Parsons Corporation (PSN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
