Shares of Penguin Solutions Inc (NASDAQ:PENG) rallied in early trading on Wednesday, after the company reported upbeat fiscal fourth-quarter results.
Here are some key analyst takeaways:
- Rosenblatt Securities analyst Sajal Dogra reiterated a Buy rating and raised the price target from $80 to $100.
- Needham analyst Matthew Calitri maintained a Buy rating and raised the price target from $80 to $85.
Check out other analyst stock ratings.
Rosenblatt Securities: Dogra said in a note that Penguin Solutions delivered such a stronger beat-and-raise quarter that it pulled the analyst’s “bull case forward by a full year.” Management expects Advanced Computing to grow around 40% at the midpoint and Memory to grow about 50% in fiscal 2027, "while we expect non-hyperscale AI compute to nearly double to ~$600M as pipeline and bookings accelerate," he added.
Compute Express Link (CXL) is ramping faster than expected, with management projecting it to contribute over 10% of Memory revenue exiting fiscal 2027, implying a quarterly contribution of around ~$50-$60 million and a path toward about $300 million in fiscal 2028, the analyst stated.
Although Services performance was softer than expected, the company landed 17 AI-infrastructure customers in fiscal 2026, typically with three-to-five-year contracts, he noted.
"With CXL and Services inflecting in 2HFY27, we see continued operating leverage, >30% gross-margin potential, and further upside," Dogra further wrote.
Needham: Penguin Solutions’ revenues grew 68% year-on-year to $567 million, Calitri said. Management raised its fiscal 2027 revenue growth guidance to 40% +/- 10%. That’s up from an initial outlook of 30%, he added.
Integrated Memory grew 158% year-on-year, driven by both volume and pricing, while Advanced Computing’s growth accelerated in the back half of fiscal 2026, the analyst stated.
"Underlying the Advanced Computing strength was a 99% yr-yr increase in Non-Hyperscaler HPC AI Business, and the combined result was an acceleration to 141% yr-yr growth in AI-Driven Business," he further wrote.
Despite pressure from hardware sales, Penguin Solutions’ gross margin is forecasted to expand, driving non-GAAP earnings growth faster than revenue growth, Calitri said.
PENG Price Action: Shares of Penguin Solutions had risen by 14.30% to $73.39 at the time of publication on Wednesday.
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