Penguin Solutions: I'm Not Buying Into The Q2 Earnings Rally

Ian BezekInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryPenguin Solutions trades at a fairly low valuation. But its growth is currently driven by memory sales, which can be notoriously volatile.Q2 FY'26 results were mixed: EPS beat expectations, but revenues fell year-over-year and margins weren't particularly impressive.The company delivered much better guidance for the remainder of 2026, however.I want to see better results from Penguin's advanced computing division before buying the stock.Looking for a portfolio of ideas like this one? Members of Ian's Insider Corner get exclusive access to our subscriber-only portfolios. Learn More » Just_Super/iStock via Getty Images Penguin Solutions (PENG) describes itself as the "AI factory platform company". It designs and deploys high-performance computing platforms, creating infrastructure to allow clients to scale up their data center and AI computing capacity. In addition to helping clientsThis article was written byIan Bezek23.56K FollowersFollowIan Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets. Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.