Penguin Solutions, Inc. (PENG)
Profitability ratios
Return on sales
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 29.29% | 28.81% | 28.01% | 22.55% | 19.28% |
| Operating profit margin | 1.56% | 0.61% | 4.81% | -1.49% | 3.68% |
| Pretax margin | -2.66% | -2.74% | 3.04% | -3.06% | 0.83% |
| Net profit margin | -4.48% | -13.01% | 4.77% | 2.02% | -0.10% |
The profitability ratios of Penguin Solutions, Inc. over the period from August 2020 to August 2024 demonstrate notable fluctuations and trends.
Gross profit margin experienced a steady increase, rising from 19.28% in 2020 to 29.29% in 2024. This upward trajectory indicates an improvement in the company's ability to manage production costs relative to revenue, reflecting enhanced efficiency or favorable product mix adjustments.
The operating profit margin showed more variability. After a modest positive of 3.68% in 2020, it turned negative at -1.49% in 2021, indicating operational challenges. Subsequently, the margin recovered to 4.81% in 2022, suggesting operational improvements. However, the margin declined again to 0.61% in 2023 and further to 1.56% in 2024, indicating ongoing fluctuations in operational profitability but with a general trend toward stabilization at modest levels.
Pre-tax margin demonstrated irregularities, swinging from 0.83% in 2020 to a negative -3.06% in 2021, then rebounding to 3.04% in 2022, before declining into negative territory again in 2023 (-2.74%) and 2024 (-2.66%). These shifts suggest volatility in pre-tax profitability, likely influenced by non-operating items, tax considerations, or other one-time expenses.
Net profit margin experienced a negative turn initially, with a slight loss of -0.10% in 2020, but then improved significantly to 2.02% in 2021, and further to 4.77% in 2022, indicating improved bottom-line performance. Nevertheless, profitability deteriorated sharply in 2023, with a substantial loss of -13.01%, and remained negative at -4.48% in 2024. This suggests recent challenges impacting net income, possibly due to increased expenses, extraordinary charges, or unfavorable revenue trends.
Overall, while the gross profit margin indicates a positive trend in gross profitability, operational and net margins have shown considerable volatility, with recent years reflecting difficulties in maintaining consistent profitability at the net level.
Return on investment
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.24% | 0.58% | 4.27% | -1.17% | 5.25% |
| Return on assets (ROA) | -3.56% | -12.45% | 4.23% | 1.58% | -0.15% |
| Return on total capital | -0.71% | -1.39% | 17.98% | -4.87% | 8.64% |
| Return on equity (ROE) | -13.41% | -84.29% | 17.91% | 6.87% | -0.41% |
The profitability ratios of Penguin Solutions, Inc. over the period from August 31, 2020, to August 31, 2024, exhibit notable variability and shifts in performance.
Starting with the Operating Return on Assets (Operating ROA), the data indicates an initial positive performance of 5.25% in 2020, followed by a decline into negative territory of -1.17% in 2021. Subsequently, there was a recovery to 4.27% in 2022, but the rate declined sharply to 0.58% in 2023 and further to 1.24% in 2024. This pattern suggests that the company's core operating efficiency experienced a downturn after 2020 but showed some stabilization in recent years.
The Return on Assets (ROA), which reflects overall profitability relative to total assets, starts marginally negative at -0.15% in 2020. It improves significantly in 2021 to 1.58% and reaches a high of 4.23% in 2022. However, the subsequent years reveal a substantial deterioration, with ROA declining to -12.45% in 2023 and further to -3.56% in 2024, indicating that overall asset profitability has faced considerable challenges recently.
The Return on Total Capital (ROTC), capturing overall efficiency in generating profit from all capital sources, shows positive figures in 2020 at 8.64%, then a dramatic decline to -4.87% in 2021. The ratio rebounds sharply in 2022 to 17.98%, suggesting improved capital utilization during that year. However, this recovery is short-lived, as ROTC declines again to -1.39% in 2023 and slightly improves to -0.71% in 2024, remaining in negative territory in the most recent years.
The Return on Equity (ROE) reflects the returns attributable to shareholders' investments. The ratio was negative at -0.41% in 2020, then increased to 6.87% in 2021 and reached a peak of 17.91% in 2022, indicating strong profitability from shareholders’ perspective during that year. However, in 2023, ROE plummeted sharply to -84.29%, and though there was a partial recovery to -13.41% in 2024, the overall trend indicates significant instability and recent below-zero performance.
In summary, Penguin Solutions, Inc.'s profitability ratios have demonstrated considerable fluctuations over the analyzed period. The company experienced periods of both positive and negative returns, with a notable peak in 2022 followed by sharp declines in subsequent years. The recent data suggests persistent challenges in maintaining consistent profitability across operating, asset, capital, and equity measures.