Is Parsons Corp. overvalued or undervalued?

As of 27 June 2025, Parsons Corp. has moved from a fair to an expensive valuation grade, indicating that the stock is currently overvalued. The company's P/E ratio stands at 32, which is significantly higher than the industry average of approximately 23.55 for peers like SS&C Technologies Holdings, Inc. and KBR, Inc., both of which are considered fairly valued. Additionally, Parsons Corp. has an EV to EBITDA ratio of 20.03, also above the peer average, suggesting a premium valuation compared to its competitors.
In terms of performance metrics, Parsons Corp. has a ROCE of 13.33% and a ROE of 13.00%, which are respectable but do not justify its high valuation relative to peers. The PEG ratio of 1.06 indicates that the stock is priced for growth, but the current valuation does not align with the overall market performance, as the company has underperformed the S&P 500 year-to-date, with a return of -23.50% compared to the index's 4.96%. Overall, Parsons Corp. appears to be overvalued in the current market context.