Penguin Solutions (PENG) AI Stock Analysis

• Market Cap: $1.11B
• Dividend Yield: N/A
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 73882.7
• Beta (1Y): 2.25
• Revenue Growth: 16.91%
• EPS Growth: N/A
• Country: US
• Employees: 2,700
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.43
• Shares Outstanding: 52,401,115
• 10 Day Avg. Volume: 2,313,170
• 30 Day Avg. Volume: 1,456,283
• PEG Ratio: -0.46
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 11.33
• Enterprise Value/Market Cap: 1.44
• Enterprise Value/Revenue: 1.17
• Enterprise Value/Gross Profit: 4.05
• Enterprise Value/Ebitda: 15.63
• 1Y Price Target: $27.31
• Price Target Upside: 29.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 57 Neutral
• Price Target: $23.50 ▲(11.06% Upside)

Penguin Solutions' overall stock score reflects moderate financial performance with room for improvement in profitability and operational efficiency. The technical analysis indicates a bearish trend, while the valuation suggests overvaluation. However, strong earnings growth and strategic advancements provide a positive outlook, despite future challenges.

Positive Factors

Revenue Growth

The 17% revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial health and market position.

Strategic Partnerships

Strategic partnerships with leading tech companies enhance product offerings and market reach, providing a competitive edge and supporting sustainable growth.

Cash Generation

Strong cash generation relative to net income ensures financial flexibility, supporting investments in growth initiatives and operational stability.

Negative Factors

Penguin Edge Business Wind Down

The wind-down of Penguin Edge reduces revenue streams, potentially impacting overall growth and necessitating strategic adjustments to offset losses.

No Hardware Sales to Hyperscale Customers

Lack of sales to hyperscale customers limits market opportunities, affecting revenue potential and requiring diversification to mitigate impact.

Profitability Concerns

Low return on equity indicates challenges in generating profits from shareholder investments, potentially hindering long-term financial performance.

Penguin Solutions Business Overview & Revenue Model

Company Description

Penguin Solutions (PENG) is a technology company specializing in high-performance computing and data solutions. It operates primarily in the sectors of artificial intelligence, machine learning, and data analytics, providing a range of products and services that include advanced computing hardware, software solutions, and consulting services. The company is known for its innovative approaches to optimizing data workflows and enhancing computational capabilities for various industries, including finance, healthcare, and research.

How the Company Makes Money

Penguin Solutions generates revenue through multiple streams. Its primary revenue model is based on the sale of high-performance computing hardware, which includes servers and specialized processors designed for data-intensive applications. Additionally, the company offers software solutions that facilitate data analysis and machine learning, contributing to its earnings through licensing fees and subscriptions. Consulting services also represent a significant revenue stream, where PENG collaborates with clients to optimize their data strategies and implement tailored solutions. Moreover, strategic partnerships with technology providers and research institutions further enhance its market reach and lead to joint ventures that can boost revenue through collaborative projects.

Penguin Solutions Financial Statement Overview

Summary

Penguin Solutions demonstrates moderate financial health with improvements in revenue growth and profitability margins. The balance sheet shows reduced leverage, but profitability relative to equity remains a concern. Cash flow metrics indicate strong cash generation, though conversion of income to cash needs attention. Overall, the company is on a positive trajectory but must focus on enhancing operational efficiency and profitability.

Income Statement

Penguin Solutions shows a modest revenue growth of 1.995% in the TTM, with a gross profit margin of 28.81% and a net profit margin of 1.85%. The EBIT margin is 4.25%, and the EBITDA margin is 7.46%. While profitability metrics have improved from previous periods, the overall margins remain relatively low, indicating room for improvement in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 1.28 from previous years, indicating a reduction in leverage. However, the return on equity is low at 5.12%, suggesting limited profitability relative to shareholder equity. The equity ratio stands at 36.85%, reflecting a moderate level of financial stability.

Cash Flow

Operating cash flow to net income ratio is negative, indicating challenges in converting income into cash. However, the free cash flow to net income ratio is strong at 1.21, suggesting effective cash generation relative to net income. Despite a decline in free cash flow growth, the company maintains a solid cash flow position.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.37B	1.37B	1.17B	1.44B	1.40B	1.06B
Gross Profit	394.35M	394.27M	342.91M	415.17M	391.05M	237.97M
EBITDA	102.15M	102.15M	62.93M	68.54M	113.49M	19.81M
Net Income	25.39M	21.58M	-52.47M	-187.53M	66.56M	21.31M
Balance Sheet
Total Assets	1.62B	1.62B	1.47B	1.51B	1.57B	1.34B
Cash, Cash Equivalents and Short-Term Investments	453.75M	453.75M	389.48M	390.81M	313.33M	222.99M
Total Debt	524.57M	524.57M	725.88M	856.85M	651.14M	398.26M
Total Liabilities	1.01B	1.01B	1.08B	1.28B	1.19B	1.03B
Stockholders Equity	595.96M	595.96M	391.38M	222.47M	371.61M	310.25M
Cash Flow
Free Cash Flow	113.18M	113.18M	57.76M	64.97M	84.57M	136.68M
Operating Cash Flow	113.18M	113.18M	77.19M	104.39M	104.93M	153.35M
Investing Cash Flow	24.97M	24.97M	107.58M	-298.57M	-38.97M	-84.18M
Financing Cash Flow	0.00	0.00	-210.10M	236.42M	73.88M	2.85M

Penguin Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PENG, the sentiment is Negative. The current price of 21.16 is below the 20-day moving average (MA) of 26.31, below the 50-day MA of 25.01, and above the 200-day MA of 20.94, indicating a neutral trend. The MACD of -0.42 indicates Positive momentum. The RSI at 30.35 is Neutral, neither overbought nor oversold. The STOCH value of 6.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PENG.

Penguin Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BELFB	77 Outperform	$1.69B	33.83	13.40%	0.20%	6.08%	-23.58%
ALNT	70 Neutral	$778.04M	53.52	5.15%	0.26%	-8.69%	-27.10%
BHE	69 Neutral	$1.29B	34.30	3.49%	1.89%	-5.95%	-43.46%
DAKT	68 Neutral	$953.62M	4,354.55	4.36%	―	-7.67%	7.66%
ROG	62 Neutral	$1.52B	72.21	-5.25%	―	-7.61%	-212.91%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PENG	57 Neutral	$1.11B	73,882.68	4.91%	―	16.91%	―

Penguin Solutions Corporate Events

Penguin Solutions Announces Leadership Changes for Growth

On July 28, 2025, Penguin Solutions announced the departure of Pete Manca and the appointment of Tony Frey and Ted Gillick to senior leadership roles as part of a strategic realignment. This move is intended to accelerate growth and support innovation, positioning the company as a leader in AI infrastructure solutions.

Penguin Solutions Secures $400M Credit Facility

On June 24, 2025, Penguin Solutions, Inc. completed a refinancing of its credit facilities by establishing a $400 million revolving credit facility, which includes a $35 million letter of credit subfacility. This move, led by JPMorgan Chase Bank and other financial institutions, replaces the existing credit facilities and reduces the company’s funded debt by $200 million. The new credit facility, maturing in 2030, aims to reduce leverage, extend debt maturity, and offer financial flexibility, ultimately decreasing debt service costs.

Penguin Solutions Approves Redomiciling to United States

Penguin Solutions, Inc. held a Scheme Meeting on June 16, 2025, to vote on a Scheme of Arrangement for redomiciling the company from the Cayman Islands to the United States. The proposal was approved by 92.25% of the shares voted, surpassing the required 75% threshold, with 73.35% of outstanding shares participating.