Penguin Solutions Inc (NASDAQ:PENG) guided to 6% revenue growth for fiscal 2026, below Street expectations of 10%, with limited near-term visibility into new hardware deployments for Meta Platforms Inc (NASDAQ:META), according to Rosenblatt Securities.
The Penguin Solutions Analyst: Analyst Kevin Cassidy reiterated a Buy rating, while lowering the price target from $36 to $30.
The Penguin Solutions Thesis: The company's revenue grew 17% to $1.37 billion, in-line with guidance, while fourth-quarter revenue came in slightly below consensus, Cassidy said in the note.
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Management's revenue guidance for fiscal 2026 incorporates only software and services revenue from Meta, he added.
The lack of new Meta hardware deployments is possibly "a timing issue related to Meta's ongoing RSC buildout and Penguin's fiscal calendar," the analyst stated. He expects Meta to resume hardware deployments involving Penguin during fiscal 2026.
Meanwhile, Penguin has added more enterprise customers, Cassidy said. "We continue to see significant value in Penguin's HPC/AI software and services as enterprise AI adoption scales and recommend buying PENG shares on weakness tied to Meta's hardware order timing," he further wrote.
PENG Price Action: Shares of Penguin Solutions had declined by 15.52% to $22.81 at the time of publication on Wednesday.
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