ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Penguin Solutions's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2026 was 9.38%.
As of today (2026-06-25), Penguin Solutions's WACC % is 24.97%. Penguin Solutions's ROIC % is 7.21% (calculated using TTM income statement data).
Penguin Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Penguin Solutions (NAS:PENG) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Penguin Solutions's WACC % is 24.97%. Penguin Solutions's ROIC % is 7.21% (calculated using TTM income statement data).
Penguin Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Penguin Solutions ROIC % Related Terms
Penguin Solutions ROIC % Historical Data
* Premium members only.
The historical data trend for Penguin Solutions's ROIC % 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 ROIC %, along with its competitors' market caps and ROIC % 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 ROIC % vs Software Industry
For the Software industry and Technology sector, Penguin Solutions's ROIC % distribution charts can be found below:
* The bar in red indicates where Penguin Solutions's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Feb. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Penguin Solutions (PENG) has a ROIC % of 9.38% as of Feb. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Penguin Solutions and its competitors.
Is Penguin Solutions' ROIC % too high?
Penguin Solutions' current ROIC % is 9.38%. The Software industry median ROIC % is 3.11. Penguin Solutions' value of 9.38% is 202.1% above this industry median. 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' ROIC % compare to VNET and KD?
Penguin Solutions' ROIC % of 9.38% can be compared against companies in the Software industry. The industry median ROIC % is 3.11. Penguin Solutions' value of 9.38% is 202.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Software company?
The median ROIC % among Software companies is 3.11, based on 2,828 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Penguin Solutions's current ROIC % of 9.38% is 202.1% 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 ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Penguin Solutions and its competitors. For the Software industry, the median ROIC % is 3.11 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Penguin Solutions's current ROIC % is 9.38%. 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 $62.40 — trading 162% above its estimated fair value. The current ROIC % is 9.38% and 202.1% above the Software industry median of 3.11. 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 ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Penguin Solutions (PENG), the current ROIC % is 9.38% 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 $62.40 is trading 162% above its estimated GF Value™ of $23.82.
GuruFocus considers Penguin Solutions to be Significantly Overvalued.
Key valuation signals for PENG:
ROIC %: 9.38%
GF Value™: $23.82 vs. price of $62.40 (162% above fair value)
Industry Position: 202.1% above the Software median
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
ROIC % 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 
