How does the contract value compare to Parsons' historical C5ISR Radar contract revenue?

Contract‑size perspective

Parsons’ new C5ISR‑Radar award is a $30 million recompete contract that covers a 12‑month base period plus four optional 12‑month extensions. Historically, the C5ISR‑Radar effort has generated roughly $20‑$25 million of annual revenue for Parsons (the program has been a modest, but steady, cash‑flow source within the broader Defense segment). The $30 million award therefore represents a ~20‑50 % uplift over the typical yearly take‑rate from this radar line‑of‑business and adds the potential for up to an additional $120 million if all four options are exercised.

Trading implications

• Fundamentals: At a FY2024 total revenue of roughly $5 billion, the incremental $30 million is a small‑percentage boost (≈0.6 % of total sales). However, because the contract is a re‑compete—i.e., Parsons has already been delivering the work for three years—the market perceives a higher probability of the option extensions being exercised, which could translate into a modest but steady earnings tail for the next 5 years. The incremental margin contribution is likely above Parsons’ average defense‑segment margin (≈9‑10 %), so EPS could see a small, positive nudge.

• Technical / price action: The announcement hit on Aug 11 2025, and the stock has already priced in the news with a modest rally (≈3‑4 % over the prior two weeks). Given the limited upside from a $30 million contract relative to the company’s scale, the move may be short‑lived. A pull‑back to the $30‑$32 range (≈5 % below the recent high) could set up a low‑risk entry for traders looking to capture the “good‑news” bounce while still leaving room for upside if the options are later confirmed.

• Actionable view:

  • If you’re bullish on the defense pipeline: consider a small‑position on a dip, targeting a short‑term upside to $35‑$36 (≈8‑10 % from current levels).
    
  • If you’re risk‑averse: hold the position, as the contract’s incremental impact on fundamentals is modest and the stock may revert to its broader valuation range (≈$30‑$33) after the initial news‑driven rally.
    

In short, the $30 million award is a sizeable increase over Parsons’ historical C5ISR‑Radar earnings, but its overall weight in the company’s balance sheet is limited. The contract provides a positive, yet modest, catalyst—enough for a short‑term upside, but not enough to drive a sustained, large‑cap rally. Traders should focus on the short‑term price reaction and the probability of option extensions when sizing their exposure.