Penguin Solutions

PENG

Hardware, Equipment & Parts · Technology

Price

$60.41

-5.56 (-8.43%)

Market Cap

$3.10B

Exchange

NASDAQ

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+5.4% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 51.6M (2021) → 54.4M (2025)

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 manage

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-6.2% YoY

YoY Growth Rate

Revenue declining

EPS Growth

+531.0% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$80M/ year

→ Flat (-2% vs prior year)

5.8% of revenue

Below sector average (15%)

Steady R&D investment year-over-year

Insider Activity

4.4%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Position

Cash flow positive

$489M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Penguin Solutions's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

27.3%

Modest — 27.3% gross margin

Operating Margin

7.5%

Modest — 7.5% operating margin

ROCE

2.3%

Weak — 2.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+10.6%

Steady sales growth (10.6% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

272%

Turns 272% of profit into real cash

FCF Margin

10.7%

Modest free cash flow (10.7%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.84

Moderate — manageable debt (0.84)

Interest Cover

18.31x

Comfortably covers interest (18.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

76.8x

Expensive — P/E 76.8

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+46.8

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (76.8 → 30.0)

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Dividends

Not applicable for this business.

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