Penguin Solutions Stock (PENG) Holding $21 Ahead of Earnings

Heading into the earnings release, analysts have set an average price target of $27.50 for PENG, suggesting a significant potential upside from the current trading price. This target reflects expectations of positive future performance, contingent on the company's ability to deliver strong results and demonstrate continued growth.

Looking to the most recent quarter for clues, Penguin Solutions announced its Q4 and full year fiscal 2025 financial results on October 7, 2025. The company reported net sales of $1.37 billion for the year, a 17% increase compared to the previous year. GAAP diluted earnings per share (EPS) stood at $0.28, a significant improvement from a loss of $(0.85) in the prior year. Non-GAAP diluted EPS rose by 53% to $1.90. For the fourth quarter, net sales were $338 million, up 9% year-over-year, with a GAAP gross margin of 28.6% and a non-GAAP gross margin of 30.9%.

However, following the earnings announcement in October, Penguin Solutions' stock experienced a notable decline. On October 8, 2025, the stock plummeted by 20.22% intraday, contributing to a two-day decline of 22.61%. This sharp decrease was attributed to the company's Q3 revenue falling short of expectations ($337.9 million vs. $342.5 million consensus) and a downward revision in the fiscal year 2026 EPS guidance.

The upcoming earnings report will be crucial in determining whether the company can regain investor confidence and demonstrate its ability to meet revised expectations. Any signs of improvement in revenue growth or profitability could trigger a positive market reaction.

Penguin Solutions completed its redomiciliation from the Cayman Islands to the United States on June 30, 2025, becoming a Delaware corporation. This strategic move is expected to streamline the company's organizational and regulatory structure, aligning with its increased business focus in the U.S. The company's common stock continues to trade on the Nasdaq Global Select Market under the ticker symbol “PENG.”

Penguin Solutions' stock performance this week will largely depend on its ability to demonstrate progress towards its stated goals and regain investor confidence following previous setbacks.