Penguin Solutions stock price target lowered to $27 at Stifel on Meta sales de-risking

Investing.com - Stifel has reduced its price target on Penguin Solutions (NASDAQ:PENG) to $27.00 from $31.00 while maintaining a Buy rating on the stock. According to InvestingPro data, the stock currently trades near its 52-week high of $29.80, having gained over 85% in the past six months.

The price target adjustment follows Penguin Computing’s fiscal fourth-quarter earnings report, which came in slightly above analyst expectations despite revenue falling short of forecasts. The company demonstrated strong expense control during the quarter, with memory performance described as strong.

For fiscal year 2025, Penguin grew revenue by 17% and delivered non-GAAP earnings per share of $1.92, exceeding both the midpoint and high end of its original guidance range. Looking ahead, the company has guided for 6% year-over-year revenue growth in fiscal 2026, below Stifel’s previous 8% projection.

Penguin’s Advanced Computing segment is expected to remain flat year-over-year, impacted by the de-risking of hardware sales to Meta and the wind-down of its non-core Penguin Edge business. Stifel noted that excluding these items, Advanced Computing would grow approximately 40% in fiscal 2026.

The new $27 price target represents 13 times Stifel’s fiscal 2026 earnings per share estimate for Penguin Solutions.

In other recent news, Penguin Solutions reported its fourth-quarter 2025 earnings, surpassing expectations with a non-GAAP diluted earnings per share (EPS) of $0.43, exceeding the forecasted $0.30. The company’s revenue for the quarter was $338 million, slightly below the projected $339 million. Rosenblatt adjusted its price target for Penguin Solutions to $30 from $36, maintaining a Buy rating, citing slightly below-consensus revenue and management’s guidance for 6% year-over-year revenue growth for fiscal 2026. Citizens reiterated its Market Outperform rating and a $26 price target for Penguin Solutions following the earnings release. The company reported a 9% year-over-year revenue increase for the fourth quarter, totaling $337.9 million, which was slightly below the consensus estimate of $342.5 million. These developments reflect the company’s recent financial performance and analyst evaluations.

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