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Parsons Corp – Computer Systems Design Services
Parsons is a leading disruptive technology provider in the global defense, intelligence, and critical infrastructure markets, with capabilities across cybersecurity, missile defense, space, connected infrastructure, and smart cities.
Analysis Results
Intrinsic Value $59.55
Latest Price $47.93
Relative Value 20% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 5.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 5.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 275 257
2023 291 255
2024 308 253
2025 327 251
2026 346 249
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 7290 million. This corresponds to a present value of 4900 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1260 million. Adding in the terminal value gives a total present value of 6160 million.

There are presently 104.0 million outstanding shares, so the intrinsic value per share is 59.55.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,632,351,000
Current Cash 342,608,000
Current Liabilities 1,030,784,000
Current Debt 0
Non-Cash Working Capital (NCWC) 258,959,000
Change in NCWC 36,847,000
EBIT 132,446,000
Tax Provision 23,636,000
Depreciation and Amortization 144,209,000
Capital Expenditure -21,105,000
Unlevered Free Cash Flow 264,592,139
Current Assets 1,843,130,000
Current Cash 483,609,000
Current Liabilities 1,187,409,000
Current Debt 50,000,000
Non-Cash Working Capital (NCWC) 222,112,000
Change in NCWC 22,773,000
EBIT 177,815,000
Tax Provision 42,492,000
Depreciation and Amortization 127,980,000
Capital Expenditure -34,036,000
Unlevered Free Cash Flow 247,722,170
Current Assets 1,526,409,000
Current Cash 182,688,000
Current Liabilities 1,144,382,000
Current Debt 0
Non-Cash Working Capital (NCWC) 199,339,000
Change in NCWC -3,086,000
EBIT 92,063,000
Tax Provision -69,886,000
Depreciation and Amortization 125,700,000
Capital Expenditure -67,597,000
Unlevered Free Cash Flow 147,080,000
Current Assets 1,436,687,000
Current Cash 228,101,000
Current Liabilities 1,006,161,000
Current Debt 0
Non-Cash Working Capital (NCWC) 202,425,000
Change in NCWC 93,343,000
EBIT 149,908,000
Tax Provision 74,755,000
Depreciation and Amortization 69,869,000
Capital Expenditure -29,283,000
Unlevered Free Cash Flow 240,702,884

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