MeritValue

Penguin Solutions, Inc.

PENGdata completeness 100%11 fiscal years on file
The thesis, from the filings

Penguin Solutions, Inc. earns about -1% on invested capital, below its ~9% cost of capital, but has diluted owners by 12% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $4.06 and $8.43 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.06B1$1.4B2$1.44B3$1.17B3$1.37B3
Net income$21.3M4$66.6M5−$187.5M6−$52.5M6$25.4M6
Operating cash flow$153.4M7$104.9M8$104.4M9$77.2M9$109.1M9
Capital expenditure$16.7M10$20.4M11$39.4M12$19.4M12$9.01M12
Free cash flow (derived)$136.7M7$84.6M8$65M9$57.8M9$100.1M9
Total debt$731.7M13$1.17B14$1.58B14$1.31B15$923.7M15
Cash & equivalents$223M16$313.3M17$365.6M18$383.1M19$453.8M19
Diluted shares48.6M54.4M51.3M52.4M54.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$72.51
your share of equity
Profit it earned you last year
$4.67
Free cash flow it threw off
$18.41
Debt you’d be carrying
$169.89

10 shares is a claim on $72.51 of net worth that earned you $4.67 and generated $18.41 of cash last year, against $169.89 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-1% avg · 5y
FY21 -5%FY22 1%FY23 -4%FY24 -2%FY25 3%

It earned about -1% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+12% shares · 5y

Share count is up 12% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 26% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $4.06 and $8.43 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$7.14
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$65M
DCF · Growth Exit 5Y
$8.43
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$65M
Earnings Power Value
$4.06
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$21.3M
  • growthAssumed0.0%
Graham Number
$6.76
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $8.43
The three cases
Bear0.0%$8.43
Base0.0%$8.43
Bull5.0%$12.56

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-08-27 · accession 0001628280-23-034807 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-08-26 · accession 0001628280-24-043646 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-08-25 · accession 0001616533-25-000061 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-08-27 · accession 0001628280-23-034807 (NetIncomeLoss)
  5. 10-K · period ending 2022-08-26 · accession 0001628280-24-043646 (NetIncomeLoss)
  6. 10-K · period ending 2023-08-25 · accession 0001616533-25-000061 (NetIncomeLoss)
  7. 10-K · period ending 2021-08-27 · accession 0001628280-23-034807 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-08-26 · accession 0001628280-24-043646 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-08-25 · accession 0001616533-25-000061 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-08-27 · accession 0001628280-23-034807 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-08-26 · accession 0001628280-24-043646 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-08-25 · accession 0001616533-25-000061 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-08-27 · accession 0001628280-22-026409 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-08-26 · accession 0001628280-24-043646 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-08-30 · accession 0001616533-25-000061 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2021-08-27 · accession 0001628280-22-026409 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-08-26 · accession 0001628280-23-034807 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-08-25 · accession 0001628280-24-043646 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-08-30 · accession 0001616533-25-000061 (CashAndCashEquivalentsAtCarryingValue)