Penguin Solutions (NASDAQ:PENG) Shares Gap Down Following Analyst Downgrade

Key Points

• Penguin Solutions shares experienced a significant drop, gapping down from a previous close of $27.00 to an opening price of $22.19 following a downgrade by Rosenblatt Securities, which lowered its price target from $36.00 to $30.00.
• Despite the downgrade, Rosenblatt maintains a buy rating on the stock, and the overall analyst consensus currently stands at an average rating of "Moderate Buy" with a price target of $28.00.
• Insider trading activity has been noted, with EVP Jack A. Pacheco selling 63,447 shares, reflecting a 21.83% decrease in his ownership, which may raise concerns about insider confidence in the stock's future performance.

Shares of Penguin Solutions, Inc. (NASDAQ:PENG - Get Free Report) gapped down prior to trading on Wednesday after Rosenblatt Securities lowered their price target on the stock from $36.00 to $30.00. The stock had previously closed at $27.00, but opened at $22.19. Rosenblatt Securities currently has a buy rating on the stock. Penguin Solutions shares last traded at $21.62, with a volume of 2,325,302 shares trading hands.

A number of other brokerages have also recently commented on PENG. Wall Street Zen cut shares of Penguin Solutions from a "strong-buy" rating to a "buy" rating in a research report on Saturday, July 12th. Loop Capital increased their target price on shares of Penguin Solutions from $30.00 to $35.00 and gave the company a "buy" rating in a research report on Monday, July 14th. The Goldman Sachs Group increased their target price on shares of Penguin Solutions from $22.50 to $25.00 and gave the company a "buy" rating in a research report on Wednesday, July 9th. Zacks Research cut shares of Penguin Solutions from a "strong-buy" rating to a "hold" rating in a research report on Monday, September 8th. Finally, Stifel Nicolaus increased their target price on shares of Penguin Solutions from $27.00 to $31.00 and gave the company a "buy" rating in a research report on Monday. One analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, two have given a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $28.00.

Insider Activity

In other Penguin Solutions news, EVP Jack A. Pacheco sold 63,447 shares of the stock in a transaction dated Monday, July 21st. The shares were sold at an average price of $24.83, for a total transaction of $1,575,389.01. Following the completion of the transaction, the executive vice president owned 227,231 shares of the company's stock, valued at $5,642,145.73. This trade represents a 21.83% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, Director Penny Herscher sold 2,046 shares of the stock in a transaction dated Tuesday, July 15th. The stock was sold at an average price of $25.42, for a total transaction of $52,009.32. Following the transaction, the director directly owned 18,222 shares of the company's stock, valued at approximately $463,203.24. This trade represents a 10.09% decrease in their position. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 66,175 shares of company stock valued at $1,644,448. 2.60% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the stock. Osaic Holdings Inc. boosted its stake in Penguin Solutions by 20.8% during the second quarter. Osaic Holdings Inc. now owns 3,583 shares of the company's stock worth $71,000 after buying an additional 617 shares during the period. Commonwealth of Pennsylvania Public School Empls Retrmt SYS boosted its stake in shares of Penguin Solutions by 6.2% in the second quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 13,545 shares of the company's stock valued at $268,000 after purchasing an additional 792 shares during the period. Inspire Investing LLC boosted its stake in shares of Penguin Solutions by 3.6% in the second quarter. Inspire Investing LLC now owns 24,293 shares of the company's stock valued at $481,000 after purchasing an additional 835 shares during the period. Crews Bank & Trust purchased a new position in shares of Penguin Solutions in the first quarter valued at approximately $28,000. Finally, CWM LLC boosted its stake in shares of Penguin Solutions by 82.1% in the second quarter. CWM LLC now owns 4,111 shares of the company's stock valued at $81,000 after purchasing an additional 1,854 shares during the period.

Penguin Solutions Trading Down 15.9%

The company's 50 day moving average price is $25.13 and its 200 day moving average price is $21.30. The company has a debt-to-equity ratio of 1.08, a current ratio of 2.62 and a quick ratio of 2.24. The firm has a market cap of $1.19 billion, a PE ratio of -81.23 and a beta of 2.20.

Penguin Solutions (NASDAQ:PENG - Get Free Report) last posted its quarterly earnings data on Tuesday, July 8th. The company reported $0.47 EPS for the quarter, beating the consensus estimate of $0.30 by $0.17. Penguin Solutions had a negative net margin of 0.68% and a positive return on equity of 13.27%. The business had revenue of $324.25 million during the quarter, compared to analyst estimates of $330.82 million. As a group, analysts forecast that Penguin Solutions, Inc. will post 1.05 EPS for the current fiscal year.

Penguin Solutions Company Profile

Penguin Solutions, Inc engages in the designing and development of enterprise solutions worldwide. It operates through three segments: Advanced Computing, Integrated Memory, and Optimized LED. It offers dynamic random access memory modules, solid-state and flash storage, and other advanced integrated memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services.

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