Penguin Solutions, Inc. (NASDAQ:PENG) is attracting investor attention following a recent analysis by Rosenblatt Securities. On October 8, the firm adjusted its price target for the stock, reducing it from $36.00 to $30.00 while maintaining a “Buy” rating. This decision comes after the company reported its fourth-quarter fiscal 2025 revenue, which fell slightly below consensus expectations. Despite this, its Non-GAAP earnings per share (EPS) exceeded forecasts.
The management team at Penguin Solutions has forecasted a 6% year-over-year revenue growth for fiscal 2026. This guidance is notably lower than the 10% growth analysts had anticipated. Rosenblatt noted that the reduced guidance primarily reflects revenue expectations from software and services related to Meta Platforms. The firm explained that there is currently a lack of clarity regarding new hardware deployments from Meta, which is largely a timing issue. This relates to Meta’s ongoing RSC buildout and aligns with Penguin’s fiscal calendar.
Expanding Customer Base and Revenue Growth
Penguin Solutions is making strides in diversifying its customer base beyond traditional hyperscalers. The company has recently partnered with a tier-1 financial institution and a major consumer products company, broadening its reach in the market. In fiscal 2025, its advanced Computing segment experienced remarkable growth, achieving a 75% increase in year-over-year revenue. Moreover, the Integrated Memory business is projected to grow between 10% and 20% year-over-year in fiscal 2026.
Rosenblatt Securities remains optimistic about the potential of Penguin’s HPC and AI software and services, particularly as enterprise adoption of artificial intelligence continues to gain momentum. The firm has recommended that investors consider purchasing PENG shares during this current dip linked to the timing of Meta’s hardware orders.
Penguin Solutions, Inc. is recognized as a leading AI and high-performance computing (HPC) company, dedicated to the design and development of enterprise solutions on a global scale. While acknowledging the inherent risks associated with investing in PENG, analysts at Rosenblatt express strong confidence in the company’s long-term prospects. They believe that certain AI stocks, including Penguin, may offer significant returns in a relatively short timeframe.
The market remains attentive to these developments, and investors are encouraged to monitor the situation closely as Penguin Solutions continues to navigate its growth strategy and capitalize on emerging opportunities.