Penguin Solutions stock rating reiterated at Market Outperform by Citizens JMP

Investing.com - Citizens JMP analyst Rustam Kanga reiterated a Market Outperform rating and $26.00 price target on Penguin Solutions (NASDAQ:PENG) following the company’s fiscal third-quarter 2025 results. According to InvestingPro analysis, the company, currently valued at $1.12 billion, appears undervalued against its Fair Value estimate.

Penguin Solutions reported revenue of $324.3 million for F3Q25, representing 8% year-over-year growth but falling short of the consensus estimate of $328.8 million. The company’s Integrated Memory segment generated $130.1 million in revenue, up 42% year-over-year and exceeding consensus expectations of $116.5 million.

The company posted non-GAAP earnings per share of $0.47, surpassing the consensus estimate of $0.32. CEO Mark Adams reaffirmed growth prospects for the Advanced Computing segment, noting increased interest from enterprise customers and new cloud customer opportunities.

Penguin Solutions stock is down approximately 0.9% year-to-date, after falling 8.6% following the earnings report that showed Advanced Computing revenues below consensus expectations. By comparison, the Russell 3000 index has gained approximately 5.7% year-to-date.

The company highlighted its core competency in managing large-scale AI infrastructure buildouts, which helps customers accelerate their time to production environments, according to the Citizens JMP research note.

In other recent news, Penguin Solutions, Inc. reported its third-quarter fiscal 2025 earnings, surpassing analyst expectations with an adjusted earnings per share of $0.47, which was 14 cents above the consensus of $0.33. However, the company’s revenue fell short of estimates, coming in at $324 million compared to the expected $330.79 million. Despite the revenue miss, this figure represents a 7.9% increase from the same quarter last year. The company maintained its guidance for fiscal year 2025, projecting a 17% year-over-year revenue growth and adjusted EPS of $1.80, which suggests confidence from management. Penguin Solutions’ gross margins saw a slight decline, with GAAP gross margin at 29.3% and non-GAAP gross margin at 31.7%. The Advanced Computing segment generated $132.5 million in revenue, Integrated Memory contributed $130.1 million, and Optimized LED added $61.6 million. CEO Mark Adams highlighted the company’s strategic focus on developing AI software and services capabilities. After the close of the third quarter, Penguin Solutions also strengthened its balance sheet through refinancing efforts.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.