PENG Stock Forecast & Price Target

Penguin Solutions, Inc. reported a significant 38% year-over-year revenue increase in the fourth quarter, reaching $132 million, driven largely by steady DRAM/NAND pricing and robust adoption of DDR5 technology. The company's Advanced Computing segment, which constitutes a substantial portion of forecasted revenue, demonstrated a 17% growth year-over-year, fueled by increasing deployments of AI and HPC infrastructure across various sectors. Integrated Memory also experienced healthy performance, with a 30% year-over-year revenue surge, indicating strong demand from customers in computing, networking, and telecommunications, contributing to an overall encouraging financial outlook for the company.

Penguin Solutions Inc. experienced a decline in cash reserves from $736 million to $434 million in the fourth quarter of fiscal year 2025, signaling potential liquidity concerns despite a year-over-year increase. The company's revenue of $338 million for the fourth quarter fell short of consensus estimates, indicating difficulty in meeting market expectations, while projected gross margins and operational expenses suggest challenges in maintaining profitability amidst a changing business mix. Additionally, the anticipated 9% year-over-year decline in Meta-related revenue, along with a 6% headwind from exiting the legacy embedded computing business, raises concerns regarding future revenue stability and overall financial performance.