Why Shares of Parsons Are Plunging Today

Parsons (PSN) shares collapsed 37.11% after the defense and infrastructure contractor slashed its 2026 guidance despite topping second-quarter earnings estimates. The company cut revenue projections from a range of $6.5 billion to $6.8 billion down to $6.2 billion to $6.5 billion. EBITDA guidance fell harder, dropping from $615 million to $675 million to a new range of $500 million to $560 million—a reduction of up to $175 million at the top end.

Management pinned the downward revisions on divestitures and the timing of new contract awards rather than underlying business deterioration. The company reported a 4% year-over-year increase in backlog, which could signal future revenue conversion if new awards materialize on schedule.

The market's sharp repricing reflects investor concern that the EBITDA cuts—far steeper than the revenue adjustments—point to margin compression or execution risk beyond the stated timing issues. The 37% single-day drop erases months of gains and resets the valuation floor for the stock.