10 Worst Performing IT Services Stocks to Buy According to Analysts

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1. Parsons Corp. (NYSE:PSN)

YTD Returns: -38%

Potential Upside: 48%

Number of Hedge Fund Holders: 41

Parsons Corp. (NYSE:PSN) is a technology-focused provider of defense, intelligence, and critical infrastructure protection solutions. The company specializes in areas such as cybersecurity, space systems, missile defense, and transportation infrastructure, serving U.S. and international government agencies as well as commercial clients.

Parsons Corp. (NYSE:PSN) has experienced a 38% decline in its share price this year, primarily due to reduced government spending under the Trump administration, project cancellations, and concerns about further potential cuts. However, in its Q4 2024 earnings call, the company highlighted that 44% of its portfolio is not reliant on federal government funding, while the remaining 56% aligns closely with the administration’s priorities. Management also emphasized that Parsons has limited exposure to federal civilian agencies facing disruptions, such as the IRS, USAID, and FEMA. Additionally, the company pointed to several recent project wins that are expected to help offset weaknesses in other areas.

Analysts have become somewhat cautious on Parsons Corp. (NYSE:PSN) due to uncertainty surrounding government spending reductions. However, the overall market sentiment remains relatively positive, with a consensus one-year median price target indicating a potential 48% upside. Demonstrating confidence in the stock, on February 24, Truist Financial analyst Tobey Sommer reiterated his Buy rating on the shares, with a price target of $85.

While we acknowledge the potential of PSN to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PSN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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