Penguin SolutionsPENG +0.28%71 Gross Margin % is 27.32% as of Feb. 2026, which is 21% above its 10-year median of 22.59. GuruFocus rates PENG with a GF Score™ of 71/100 and a GF Value™ of $23.82 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 2,683 Software companies, Penguin Solutions ranks worse than 65.64% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Penguin Solutions had a gross margin of 27.32% for the quarter that ended in Feb. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Penguin Solutions Gross Margin % Related Terms
Penguin Solutions Gross Margin % Historical Data
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The historical data trend for Penguin Solutions's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Information Technology Services subindustry, Penguin Solutions's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Penguin Solutions Gross Margin % vs Software Industry
For the Software industry and Technology sector, Penguin Solutions's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Penguin Solutions's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Penguin Solutions (PENG) has a Gross Margin % of 27.32% as of Feb. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Penguin Solutions and its competitors. This is 21% above median its historical median of 22.59. Over the past decade, Penguin Solutions' Gross Margin % has ranged from 19.28 to 29.11. According to the industry distribution chart, Penguin Solutions ranks #1761 out of 2683 companies in the Software industry, placing it in the top 65.6%.
Is Penguin Solutions' Gross Margin % too high?
Penguin Solutions' current Gross Margin % of 27.32% is 21% above median its 10-year median of 22.59. Over the past 10 years, this metric has ranged from a low of 19.28 to a high of 29.11. The Software industry median Gross Margin % is 40.45. Penguin Solutions' value of 27.32% is 32.5% below this industry median. Based on the distribution chart, Penguin Solutions ranks #1761 out of 2683 companies in the Software industry, which is below the industry midpoint. Overall, Penguin Solutions has a GF Score™ of 71/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Penguin Solutions' Gross Margin % compare to VNET and KD?
According to the Software industry distribution chart, Penguin Solutions ranks #1761 out of 2683 companies for Gross Margin %. This places Penguin Solutions in the lower half of its industry. The industry median Gross Margin % is 40.45. Penguin Solutions' value of 27.32% is 32.5% below this benchmark. Historically, Penguin Solutions' own Gross Margin % has ranged from 19.28 to 29.11 over the past decade. While the company's 10-year median is 22.59 vs. the industry median of 40.45, Penguin Solutions has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,683 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Penguin Solutions's current Gross Margin % of 27.32% is 32.5% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Penguin Solutions and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Penguin Solutions's current Gross Margin % is 27.32%, which is 21% above median its own 10-year median of 22.59. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Penguin Solutions stock overvalued right now?
Based on GuruFocus' analysis, Penguin Solutions (PENG) is currently considered Significantly Overvalued. The stock's GF Value™ is $23.82, compared to a current price of $64.90 — trading 172.4% above its estimated fair value. The current Gross Margin % is 27.32%, which is 21% above median its 10-year median of 22.59 and 32.5% below the Software industry median of 40.45. Penguin Solutions' overall GF Score™ is 71/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Penguin Solutions (PENG), the current Gross Margin % is 27.32% as of Feb. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Penguin Solutions (PENG) Overvalued in 2026?
Based on GuruFocus' analysis, Penguin Solutions stock appears to be overvalued.
The current stock price of $64.90 is trading 172.4% above its estimated GF Value™ of $23.82.
GuruFocus considers Penguin Solutions to be Significantly Overvalued.
Key valuation signals for PENG:
Gross Margin %: 27.32% (21% above median its 10-year median of 22.59)
GF Value™: $23.82 vs. price of $64.90 (172.4% above fair value)
Industry Position: 32.5% below the Software median (#1761 of 2683)
No single metric tells the full story. See the PENG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Penguin Solutions Inc is an end-to-end technology company engaged in Intelligent Platform Solutions, Integrated Memory, and Optimized LED business. Its product include Servers, software, OCP HPC & AI system, Racks and Edge. Servers include AMD-based Serves, Intel-based Servers, etc. Software products include Scyld ClusterWare, Scyld Cloud Central, etc. OCP HPC & AI Systems includes OCP Servers & Storage and etc.
71GF Score
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