Key Takeaways
- Penguin Solutions shares rose 13% after record fiscal fourth-quarter sales of $567 million, up 68%, and non-GAAP EPS of $1.00, well above the 77-cent consensus.
- Penguin raised its fiscal 2027 outlook to about $2.43 billion in sales and $4.45 in non-GAAP EPS, well above consensus of $2.21 billion and $3.38.
- Integrated Memory drove the quarter’s growth, while management credits AI infrastructure, including a new 36,000-GPU AI factory in Norway, for the raise.
- Growth used $152 million of operating cash in fiscal 2026, and the forward P/E sits well above its five-year average.
Penguin Solutions (PENG) shares are up 13% following a record fiscal fourth quarter, reported after Tuesday’s close, and a raised outlook for fiscal 2027.
Sales for the three months to Aug. 28 rose 68% to $567 million, ahead of the $521 million analysts expected. Non-GAAP EPS of $1.00 beat the 77-cent consensus.
“The proof is in the results”
That’s how president and CEO Kash Shaikh put it, pointing to the trend: “After relatively flat year-over-year net sales in the first half, growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%.”
Hard to argue with that.
Memory paid for the quarter
Nearly all of the jump came from memory. Integrated Memory sales rose to $341 million from $132 million a year ago, while Advanced Computing grew 11% to $154 million.
The AI factory business is what moved the outlook. Penguin won six new AI infrastructure customers in the quarter, four of them neoclouds. One, with $10 billion in contracted compute from a leading AI lab, picked Penguin to deploy and operate a 36,000-GPU AI factory in Norway.
Shaikh said the raise rests on “continued momentum, particularly the strength in AI Infrastructure.”
It gets better
Penguin now expects fiscal 2027 sales of about $2.43 billion at the midpoint, up from the $2.17 billion preliminary view it gave last quarter. Its non-GAAP EPS guide of $4.45 would be 55% growth on fiscal 2026’s $2.87, and analysts were at $3.38 before the report…
Even after Wednesday’s updates, consensus sits at $4.09, below the $4.45 guide, so I’d expect estimates to keep rising.
Is it priced in?
The stock isn’t, like, terribly cheap: before today’s move, it traded at 20x forward earnings, well above its five-year average of 11.9x…
At today’s price, it’s closer to 23x, below the 29.4x peak from June. But for a company guiding to 55% earnings growth, that looks pretty good.
The risk is cash. Growth used $152 million of operating cash in fiscal 2026, as inventories rose to $749 million from $255 million. With help from a new $750 million convertible with a 0% coupon, Penguin ended the year with $647 million in cash.
So yes, the results back Shaikh up, and the neocloud wins give the raised outlook something real behind it. Of course, this quarter leaned on memory, and that Norway AI factory still has to show up in sales.
So what is Penguin Solutions stock actually worth?
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