Penguin Solutions (NASDAQ:PENG) Trading Up 13.8% - Should You Buy?

Key Points

• Shares jumped 13.8% intraday to about $36.89 on Tuesday with roughly 3.1 million shares traded, about 120% above the stock's average daily volume, signaling heavy buying interest.
• Analysts are mixed but generally positive: MarketBeat shows a consensus rating of "Moderate Buy" with a $27.25 target amid recent actions like Barclays' shift to equal weight (raising its price objective) and Goldman Sachs initiating coverage with a buy.
• Penguin beat Q1 expectations (EPS $0.52 vs. $0.43; revenue $343M vs. $339M) but still trades at a high valuation (PE ~50.6); insiders have sold about 30,115 shares over the last three months, representing 2.9% ownership.

Penguin Solutions, Inc. (NASDAQ:PENG - Get Free Report)'s stock price was up 13.8% on Tuesday . The company traded as high as $36.50 and last traded at $36.8850. Approximately 3,099,770 shares changed hands during mid-day trading, an increase of 120% from the average daily volume of 1,407,406 shares. The stock had previously closed at $32.40.

Analyst Ratings Changes

A number of analysts have recently weighed in on PENG shares. Barclays lowered shares of Penguin Solutions from an "overweight" rating to an "equal weight" rating and increased their price objective for the stock from $23.00 to $27.00 in a research note on Wednesday, April 22nd. Weiss Ratings upgraded shares of Penguin Solutions from a "sell (d+)" rating to a "hold (c-)" rating in a research note on Monday, April 6th. Rosenblatt Securities restated a "buy" rating and set a $30.00 price target on shares of Penguin Solutions in a research report on Monday, March 30th. The Goldman Sachs Group started coverage on shares of Penguin Solutions in a research report on Tuesday, January 13th. They set a "buy" rating and a $25.00 price target on the stock. Finally, Stifel Nicolaus dropped their price target on shares of Penguin Solutions from $27.00 to $24.00 and set a "buy" rating on the stock in a research report on Thursday, April 2nd. One research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating and three have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Penguin Solutions currently has a consensus rating of "Moderate Buy" and a consensus target price of $27.25.

Penguin Solutions Trading Up 12.5%

The company has a debt-to-equity ratio of 1.09, a current ratio of 2.10 and a quick ratio of 1.55. The firm has a market capitalization of $1.85 billion, a PE ratio of 50.63 and a beta of 2.66. The company's fifty day simple moving average is $21.47 and its 200-day simple moving average is $20.69.

Penguin Solutions (NASDAQ:PENG - Get Free Report) last posted its quarterly earnings data on Wednesday, April 1st. The company reported $0.52 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.43 by $0.09. The business had revenue of $343.00 million for the quarter, compared to the consensus estimate of $339.00 million. Penguin Solutions had a net margin of 4.07% and a return on equity of 19.94%. As a group, sell-side analysts expect that Penguin Solutions, Inc. will post 1.66 earnings per share for the current fiscal year.

Insider Activity

In other news, SVP Joseph Gates Clark sold 12,546 shares of the firm's stock in a transaction dated Thursday, April 9th. The shares were sold at an average price of $22.55, for a total value of $282,912.30. Following the transaction, the senior vice president directly owned 99,726 shares of the company's stock, valued at approximately $2,248,821.30. This trade represents a 11.17% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP Anne Kuykendall sold 4,000 shares of the firm's stock in a transaction dated Monday, March 16th. The stock was sold at an average price of $17.75, for a total transaction of $71,000.00. Following the completion of the transaction, the senior vice president directly owned 131,352 shares in the company, valued at approximately $2,331,498. This represents a 2.96% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 30,115 shares of company stock worth $723,997. Insiders own 2.90% of the company's stock.

Hedge Funds Weigh In On Penguin Solutions

Hedge funds and other institutional investors have recently modified their holdings of the business. Farther Finance Advisors LLC lifted its stake in shares of Penguin Solutions by 187.0% in the fourth quarter. Farther Finance Advisors LLC now owns 1,452 shares of the company's stock worth $28,000 after buying an additional 946 shares in the last quarter. Kestra Advisory Services LLC purchased a new position in shares of Penguin Solutions in the fourth quarter worth about $29,000. Strs Ohio purchased a new position in shares of Penguin Solutions in the third quarter worth about $42,000. Jones Financial Companies Lllp lifted its stake in shares of Penguin Solutions by 4,131.7% in the third quarter. Jones Financial Companies Lllp now owns 1,735 shares of the company's stock worth $45,000 after buying an additional 1,694 shares in the last quarter. Finally, Allworth Financial LP lifted its stake in shares of Penguin Solutions by 41.4% in the third quarter. Allworth Financial LP now owns 1,792 shares of the company's stock worth $47,000 after buying an additional 525 shares in the last quarter.

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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