ADTRAN (NASDAQ:ADTN – Get Free Report) and Parsons (NYSE:PSN – Get Free Report) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.
Valuation & Earnings
This table compares ADTRAN and Parsons”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ADTRAN | $1.08 billion | 0.96 | -$45.66 million | ($0.39) | -33.00 |
| Parsons | $6.36 billion | 0.95 | $241.14 million | $2.09 | 27.15 |
Risk & Volatility
ADTRAN has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, Parsons has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.
Profitability
This table compares ADTRAN and Parsons’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ADTRAN | -3.18% | 10.94% | 1.35% |
| Parsons | 3.62% | 11.52% | 5.36% |
Insider & Institutional Ownership
80.6% of ADTRAN shares are owned by institutional investors. Comparatively, 98.0% of Parsons shares are owned by institutional investors. 2.2% of ADTRAN shares are owned by insiders. Comparatively, 1.3% of Parsons shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current recommendations and price targets for ADTRAN and Parsons, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ADTRAN | 1 | 1 | 4 | 0 | 2.50 |
| Parsons | 0 | 6 | 9 | 0 | 2.60 |
ADTRAN currently has a consensus target price of $18.00, indicating a potential upside of 39.86%. Parsons has a consensus target price of $75.82, indicating a potential upside of 33.62%. Given ADTRAN’s higher possible upside, equities analysts plainly believe ADTRAN is more favorable than Parsons.
Summary
Parsons beats ADTRAN on 10 of the 14 factors compared between the two stocks.
About ADTRAN
ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.
About Parsons
Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. The company operates through Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment provides critical technologies, such as cybersecurity; missile defense; intelligence; space launch and ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and bio surveillance solutions to U.S. Department of Defense, including military services; Missile Defense Agency, the Department of Energy; the Department of State; the Department of Homeland Security, and the Federal Aviation Administration. The Critical Infrastructure segment provides management, design, and engineering services, as well as offers leveraging sensor solutions. This segment develops digital solutions for next generation aviation, rail and transit, bridges, roads, and highways; and provides water and wastewater treatment systems; AI/ML, and digital twin and cyber systems integration services; planning, engineering, and management services for infrastructure, including bridges and tunnels, roads and highways, water and wastewater, and dams and reservoirs. Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.
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