With Penguin Solutions Stock Sliding, Have You Assessed The Risk?
Penguin Solutions (PENG) stock is down 13.8% in a day. The recent slide reflects renewed concerns around PENG’s lower-than-expected guidance in its edge AI platforms and growing cybersecurity competition, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn resilience, let’s look at where Penguin Solutions stands today.
- Size: Penguin Solutions is a $983 Mil company with $1.4 Bil in revenue currently trading at $18.58.
- Fundamentals: Last 12 month revenue growth of 10.8% and operating margin of 5.8%.
- Liquidity: Has Debt to Equity ratio of 0.53 and Cash to Assets ratio of 0.29
- Valuation: Penguin Solutions stock is currently trading at P/E multiple of 38.6 and P/EBIT multiple of 20.7
- Has returned (median) 49.6% within a year following sharp dips since 2010. See PENG Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside moderate valuation, making the stock Unattractive. For details, see Buy or Sell PENG Stock
That brings us to the key consideration for investors worried about this fall: how resilient is PENG stock if markets turn south? This is where our downturn resilience framework comes in. Suppose PENG stock falls another 20-30% to $13 – can investors comfortably hold on? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- PENG stock fell 65.4% from a high of $36.50 on 3 January 2022 to $12.63 on 20 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $29.35 on 15 July 2024 , and currently trades at $18.58
| PENG | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -65.4% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- PENG stock fell 55.4% from a high of $19.47 on 2 January 2020 to $8.68 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 5 January 2021
| PENG | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.4% | -33.9% |
| Time to Full Recovery | 293 days | 148 days |
2018 Correction
- PENG stock fell 68.7% from a high of $27.23 on 27 March 2018 to $8.52 on 31 May 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 April 2021
| PENG | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -68.7% | -19.8% |
| Time to Full Recovery | 677 days | 120 days |
Feeling jittery about PENG stock? Consider portfolio approach.
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