PENG Stock Forecast & Price Target

Penguin Solutions Inc. is projected to experience a steady revenue increase, with an estimated 5% sequential growth in 2QFY25, bringing revenue to approximately $105.7 million and continuing this growth trend throughout the fiscal year. In particular, the Advanced Computing segment is anticipated to see year-over-year revenue growth of 10-25%, driven by significant demand from a major customer, which reflects strong market dynamics supporting the company's performance. Additionally, the Integrated Memory revenue is expected to rise by 10-20% year-over-year, further solidifying a positive outlook for the company's financial trajectory as evidenced by last quarter's revenue results across key segments.

Penguin Solutions Inc. is projecting an annual revenue growth of 15% year-over-year, yet this guidance is supported by a lower-than-expected adjusted Non-GAAP EPS, which has declined to $1.50 following the inclusion of dividend payments. Additionally, the company's Integrated Memory revenue experienced only a modest increase of 0.9% quarter-over-quarter to $96.7 million, falling short of expectations, indicating potential challenges in meeting future financial targets. The non-GAAP gross margin also came in lower than both the company's and market expectations at 30.8%, driven by a higher revenue mix from hardware, raising concerns about the overall profitability and growth prospects for FY25.