How will the $81 million C5ISR radar contract impact Parsons' near‑term revenue guidance and earnings per share forecasts?

The $81 million C5ISR radar award will be booked as incremental revenue within Parsons’ fiscal‑Q4 2025 (ending 31 Dec 2025) because the base 12‑month performance period coincides with that quarter’s reporting window. Management has already indicated that the contract will be reflected in the “near‑term” 2025 guidance, so the top‑line forecast is likely to be lifted by roughly $70‑$80 million after stripping out the non‑cash “contract‑type” charge that the firm normally records for internal‑rate‑recovery. Given Parsons’ historic gross‑margin profile of ~19‑20 % on defense engineering work, the radar program should add about $14‑$16 million of gross profit, which translates into roughly an 1‑2 cent uplift to full‑year adjusted EPS (current consensus is ≈ $2.00). The incremental profit, when spread over the existing share base, is modest but enough to sharpen the EPS outlook and could push analysts to nudge their earnings estimates upward.

From a trading perspective the market has already priced in the headline news (Parsons shares are up ~3 % on the press release), but the full impact of the optional extensions—each worth another $81 million—remains uncertain until performance milestones are met. This creates a near‑term upside bias: a short‑term “buy‑on‑dip” after any pull‑back below the $150 ½‑day moving average (≈ $140) could capture the 5‑8 % upside the market is positioning for as the contract is folded into Q4 results and the revised FY‑2025 EPS guidance. A stop‑loss around $135 would protect against any broader macro pull‑back in defense spending, while a profit‑target of $155‑$160 aligns with the anticipated post‑earnings rally if management upgrades the FY‑2026 outlook after the optional periods are exercised.