Penguin Solutions (PENG) PT Raised to $85 at Citizens: Mostly Growing at 3-Digit Rate

Citizens analyst Rustam Kanga raised the price target on Penguin Solutions (NASDAQ: PENG) to $85.00 (from $65.00) while maintaining a Market Outperform rating.

The analyst commented, "We reiterate our Market Outperform rating and raise our price target to $85, assuming roughly the same valuation multiple on our substantially raised revenue and adjusted EBITDA estimates. PENG currently trades at a CY27E EV/EBITDA multiple of 11.3x, while our revised $85 price target implies a multiple of 14.2x (our prior $65 PT implied 14.4x based on our prior model estimates), an ~18% premium to our computer hardware, semiconductors, memory, and storage peer group median multiple of 12.0x, which we believe is justified given the company’s three-decade track record of machine learning and high-performance computing expertise, coupled with the fact that nearly three-quarters of this business is now AI-driven and is growing at a triple-digit rate."

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