PENG
Penguin Solutions, Inc.
$51.30
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 1045.1% above fair value
You pay
$51.30
Bear
$3.36
Fair
$4.48
Bull
$5.60
Bear
$3.36
-93.5%
$0.28 × 12x
Fair
$4.48
-91.3%
$0.28 × 16x
Bull
$5.60
-89.1%
$0.28 × 20x
Adjust Assumptions
16.0x
0.28$
Key Value Driver
Through-cycle normalized EPS ($0.28)
Implied Market Multiple
183.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$65.00
Divergence from AlphaVal
93%
Summary
Using 7-year normalized EPS of $0.28 at a 16x cycle multiple, the base-case value is $4.48 per share. P/TBV cross-check: 7.3x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Price-to-book value of 7.3x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $65.00 (from 9 analysts). Our estimate is 93% below the consensus -- consider that gap carefully.
This stock is 43% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing