Penguin SolutionsPENG +11.93%71 Return-on-Tangible-Equity is 40.27% as of Feb. 2026, which is 214% above its 10-year median of 12.81. GuruFocus rates PENG with a GF Score™ of 71/100 and a GF Value™ of $23.84 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 2,471 Software companies, Penguin Solutions ranks better than 61.11% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Penguin Solutions's annualized net income for the quarter that ended in Feb. 2026 was $150 Mil. Penguin Solutions's average shareholder tangible equity for the quarter that ended in Feb. 2026 was $372 Mil. Therefore, Penguin Solutions's annualized Return-on-Tangible-Equity for the quarter that ended in Feb. 2026 was 40.27%.
The historical rank and industry rank for Penguin Solutions's Return-on-Tangible-Equity or its related term are showing as below:
PENG'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -1264.23 Med: 12.81 Max: 162.82
Current: 15.31
During the past 11 years, Penguin Solutions's highest Return-on-Tangible-Equity was 162.82%. The lowest was -1,264.23%. And the median was 12.81%.
PENG's Return-on-Tangible-Equity is ranked better than 61.11% of 2471
companies
in the Software industry
Industry Median: 8.77
vs PENG: 15.31
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Penguin Solutions Return-on-Tangible-Equity Related Terms
Penguin Solutions Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Penguin Solutions's Return-on-Tangible-Equity 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.
PENG vs CHRN, PONY, KD: Return-on-Tangible-Equity Comparison
For the Information Technology Services subindustry, Penguin Solutions's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Penguin Solutions's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Penguin Solutions's Return-on-Tangible-Equity 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Feb. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 40.27% mean?
Penguin Solutions (PENG) has a Return-on-Tangible-Equity of 40.27% as of Feb. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Penguin Solutions and its competitors. This is 214% above median its historical median of 12.81. According to the industry distribution chart, Penguin Solutions ranks #961 out of 2471 companies in the Software industry, placing it in the top 38.9%.
Is Penguin Solutions' Return-on-Tangible-Equity too high?
Penguin Solutions' current Return-on-Tangible-Equity of 40.27% is 214% above median its 10-year median of 12.81. The Software industry median Return-on-Tangible-Equity is 8.77. Penguin Solutions' value of 40.27% is 359.2% above this industry median. Based on the distribution chart, Penguin Solutions ranks #961 out of 2471 companies in the Software industry, which is above 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' Return-on-Tangible-Equity compare to CHRN and PONY?
According to the Software industry distribution chart, Penguin Solutions ranks #961 out of 2471 companies for Return-on-Tangible-Equity. This puts Penguin Solutions in the upper half of its industry. The industry median Return-on-Tangible-Equity is 8.77. Penguin Solutions' value of 40.27% is 359.2% above this benchmark. While the company's 10-year median is 12.81 vs. the industry median of 8.77, Penguin Solutions has consistently been above 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 Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 8.77, based on 2,471 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Penguin Solutions's current Return-on-Tangible-Equity of 40.27% is 359.2% above 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Penguin Solutions and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 8.77 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Penguin Solutions's current Return-on-Tangible-Equity is 40.27%, which is 214% above median its own 10-year median of 12.81. 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 $23.84, compared to a current price of $76.01 — trading 218.8% above its estimated fair value. The current Return-on-Tangible-Equity is 40.27%, which is 214% above median its 10-year median of 12.81 and 359.2% above the Software industry median of 8.77. 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 Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Penguin Solutions (PENG), the current Return-on-Tangible-Equity is 40.27% 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 $76.01 is trading 218.8% above its estimated GF Value™ of $23.84.
GuruFocus considers Penguin Solutions to be Significantly Overvalued.
Key valuation signals for PENG:
Return-on-Tangible-Equity: 40.27% (214% above median its 10-year median of 12.81)
GF Value™: $23.84 vs. price of $76.01 (218.8% above fair value)
Industry Position: 359.2% above the Software median (#961 of 2471)
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
Get the complete analysis for PENG
Return-on-Tangible-Equity is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
PENG has been successfully added to your 
