Penguin Solutions (NASDAQ:PENG) Shares Climb 9% - Still a Buy?

Key Points

• Penguin Solutions shares rose 9% to approximately $59.93, although trading volume was 84% below the average session volume.
• Analyst sentiment is generally positive, with six Buy ratings, two Holds and one Sell; the stock has a “Moderate Buy” consensus and an average price target of $64.17, including Needham’s $80 target and Barclays’ $40 target.
• The company beat quarterly expectations, reporting $0.84 in EPS versus the $0.63 consensus and revenue of $478.71 million versus estimates of $407.47 million. Major institutions, including BlackRock, also established significant new positions.

Shares of Penguin Solutions, Inc. (NASDAQ:PENG - Get Free Report) were up 9% on Friday. The stock traded as high as $60.07 and last traded at $59.9320. 370,380 shares were traded during trading, a decline of 84% from the average session volume of 2,274,378 shares. The stock had previously closed at $54.98.

Wall Street Analysts Forecast Growth

Several equities analysts have recently commented on PENG shares. Wall Street Zen lowered shares of Penguin Solutions from a "strong-buy" rating to a "buy" rating in a report on Sunday, July 26th. Barclays downgraded shares of Penguin Solutions from an "equal weight" rating to an "underweight" rating and set a $40.00 target price for the company. in a report on Monday, July 20th. Citigroup restated an "outperform" rating on shares of Penguin Solutions in a research note on Wednesday, July 8th. Weiss Ratings upgraded Penguin Solutions from a "hold (c-)" rating to a "hold (c)" rating in a research report on Wednesday, July 8th. Finally, Needham & Company LLC lifted their price objective on Penguin Solutions from $60.00 to $80.00 and gave the company a "buy" rating in a research note on Wednesday, July 8th. Six analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, Penguin Solutions currently has an average rating of "Moderate Buy" and an average price target of $64.17.

Penguin Solutions Price Performance

The company's 50-day simple moving average is $53.08 and its 200 day simple moving average is $48.63. The company has a market cap of $3.11 billion, a PE ratio of 42.70 and a beta of 2.86. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.10 and a current ratio of 1.54.

Penguin Solutions (NASDAQ:PENG - Get Free Report) last posted its quarterly earnings data on Tuesday, July 7th. The company reported $0.84 earnings per share for the quarter, topping analysts' consensus estimates of $0.63 by $0.21. The business had revenue of $478.71 million for the quarter, compared to analyst estimates of $407.47 million. Penguin Solutions had a return on equity of 28.23% and a net margin of 6.44%.During the same quarter in the prior year, the company earned $0.52 earnings per share. On average, sell-side analysts predict that Penguin Solutions, Inc. will post 2.08 earnings per share for the current fiscal year.

Insider Activity

In other Penguin Solutions news, SVP Joseph Clark sold 1,327 shares of the company's stock in a transaction dated Thursday, July 23rd. The stock was sold at an average price of $57.47, for a total transaction of $76,262.69. Following the sale, the senior vice president owned 63,056 shares in the company, valued at $3,623,828.32. This represents a 2.06% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through 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 stock in a transaction dated Monday, August 24th. The shares were sold at an average price of $50.58, for a total value of $202,320.00. Following the completion of the sale, the senior vice president directly owned 112,994 shares in the company, valued at $5,715,236.52. This represents a 3.42% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 2.90% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the company. BlackRock Inc. purchased a new position in shares of Penguin Solutions in the 2nd quarter valued at $581,658,000. Barrow Hanley Mewhinney & Strauss LLC purchased a new stake in Penguin Solutions in the second quarter valued at $150,192,000. Paradigm Capital Management Inc. NY purchased a new stake in Penguin Solutions in the second quarter valued at $52,135,000. William Blair Investment Management LLC acquired a new position in Penguin Solutions in the second quarter valued at $34,207,000. Finally, Bank of New York Mellon Corp purchased a new position in shares of Penguin Solutions during the second quarter worth about $22,503,000.

About Penguin Solutions

Penguin Solutions, Inc provides intelligent infrastructure solutions for artificial intelligence, high-performance computing, enterprise data centers and other demanding technology environments. The company combines specialized hardware, software and professional services to help organizations design, deploy and manage complex computing infrastructure.

Its offerings include AI and high-performance computing systems, servers, storage and networking infrastructure, as well as software and services for infrastructure management, optimization and support.

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