📊 PENG Key Takeaways
Is Penguin Solutions, Inc. (PENG) a Good Investment?
Despite strong earnings growth (+64.2% net income, +128% EPS), Penguin Solutions exhibits severe cash flow deterioration with operating cash flow of only $11.2M on $1.2B revenue and near-zero free cash flow of $3.9M. The massive disconnect between reported profitability and actual cash generation raises critical concerns about earnings quality and sustainability, particularly problematic given $443.2M long-term debt requiring ~40 years of current operating cash flow to retire.
Penguin Solutions shows improving reported profitability, with net income up 64.2% and diluted EPS up 128.0%, while maintaining positive operating and net margins. However, extremely weak cash conversion, modest margins, and meaningful leverage reduce the quality of that growth and warrant caution until operating cash flow improves.
Penguin Solutions, Inc. Key Strengths (PENG)
- Strong earnings growth: Net income +64.2% YoY and diluted EPS +128% YoY
- Healthy return on equity of 19.9% and reasonable net margin of 7.5%
- Adequate liquidity position with current ratio of 1.54x and $440.3M cash balance
- Strong net income and diluted EPS growth
- Adequate liquidity with a 1.54x current ratio and 1.10x quick ratio
- Cash and equivalents of $440.30M nearly cover long-term debt of $443.16M
PENG Stock Risks: Penguin Solutions, Inc. Investment Risks
- Critical cash flow crisis: Operating cash flow of $11.2M (0.9% of revenue) grossly inadequate for $1.2B revenue scale
- Earnings quality concerns: Strong earnings growth not reflected in cash generation suggests aggressive accounting or working capital deterioration
- Unsustainable leverage: $443.2M long-term debt combined with minimal free cash flow ($3.9M) creates significant debt service risk and limits strategic flexibility
- Free cash flow of only $3.92M and a 0.3% FCF margin indicate poor earnings-to-cash conversion
- Debt-to-equity of 1.01x represents meaningful balance-sheet leverage
- Gross margin of 27.7% and operating margin of 8.3% provide limited protection against semiconductor-cycle weakness
Key Metrics to Watch
- Operating cash flow trend and working capital dynamics
- Cash conversion cycle and receivables/inventory turnover
- Debt-to-operating cash flow ratio and debt service coverage
- Revenue growth rate and gross margin sustainability
- Operating cash flow and free-cash-flow conversion
- Operating margin and revenue growth
Penguin Solutions, Inc. (PENG) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 0.3% FCF margin may limit capital allocation flexibility.
PENG Profit Margin, ROE & Profitability Analysis
PENG vs Technology Sector: How Penguin Solutions, Inc. Compares
How Penguin Solutions, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Penguin Solutions, Inc. Stock Overvalued? PENG Valuation Analysis 2026
Based on fundamental analysis, Penguin Solutions, Inc. shows some fundamental concerns relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Penguin Solutions, Inc. Balance Sheet: PENG Debt, Cash & Liquidity
PENG Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Penguin Solutions, Inc.'s revenue has remained relatively flat over the 5-year period, with a 4% decline. The most recent EPS of $-3.65 indicates the company is currently unprofitable.
PENG Revenue Growth, EPS Growth & YoY Performance
PENG Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $324.3M | $2.7M | $-0.01 |
| Q2 2026 | $343.0M | $8.1M | $0.09 |
| Q1 2026 | $341.1M | $5.2M | $0.04 |
| Q3 2025 | $300.6M | $2.7M | $-0.01 |
| Q2 2025 | $284.8M | $8.1M | $0.09 |
| Q1 2025 | $274.2M | $5.2M | $0.10 |
| Q3 2024 | $300.6M | $5.6M | $0.10 |
| Q2 2024 | $284.8M | -$13.6M | $-0.26 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Penguin Solutions, Inc. Dividends, Buybacks & Capital Allocation
PENG SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Penguin Solutions, Inc. (CIK: 0001616533)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Jul 27, 2026 | 4 | xslF345X06/wk-form4_1785199287.xml | View → |
| Jul 22, 2026 | 4 | xslF345X06/wk-form4_1784760082.xml | View → |
| Jul 22, 2026 | 4 | xslF345X06/wk-form4_1784759873.xml | View → |
| Jul 22, 2026 | 4 | xslF345X06/wk-form4_1784759576.xml | View → |
| Jul 22, 2026 | 4 | xslF345X06/wk-form4_1784759451.xml | View → |
❓ Frequently Asked Questions about PENG
What is the AI rating for PENG?
Penguin Solutions, Inc. (PENG) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 68% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are PENG's key strengths?
Claude: Strong earnings growth: Net income +64.2% YoY and diluted EPS +128% YoY. Healthy return on equity of 19.9% and reasonable net margin of 7.5%. ChatGPT: Strong net income and diluted EPS growth. Adequate liquidity with a 1.54x current ratio and 1.10x quick ratio.
What are the risks of investing in PENG?
Claude: Critical cash flow crisis: Operating cash flow of $11.2M (0.9% of revenue) grossly inadequate for $1.2B revenue scale. Earnings quality concerns: Strong earnings growth not reflected in cash generation suggests aggressive accounting or working capital deterioration. ChatGPT: Free cash flow of only $3.92M and a 0.3% FCF margin indicate poor earnings-to-cash conversion. Debt-to-equity of 1.01x represents meaningful balance-sheet leverage.
What is PENG's revenue and growth?
Penguin Solutions, Inc. reported revenue of $1.2B.
Does PENG pay dividends?
Penguin Solutions, Inc. does not currently pay dividends.
Where can I find PENG SEC filings?
Official SEC filings for Penguin Solutions, Inc. (CIK: 0001616533) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is PENG's EPS?
Penguin Solutions, Inc. has a diluted EPS of $1.29.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is PENG's fundamental grade?
Based on our AI fundamental analysis in August 2026, Penguin Solutions, Inc. has a C grade with 68% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is PENG stock overvalued or undervalued?
Valuation metrics for PENG: ROE of 19.9% (sector avg: 22%), net margin of 7.5% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is PENG's AI grade for 2026?
Our dual AI analysis gives Penguin Solutions, Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is PENG's free cash flow?
Penguin Solutions, Inc.'s operating cash flow is $11.2M, with capital expenditures of $7.3M. FCF margin is 0.3%.
How does PENG compare to other Technology stocks?
Vs Technology sector averages: Net margin 7.5% (avg: 18%), ROE 19.9% (avg: 22%), current ratio 1.54 (avg: 2.5).