Penguin Solutions, Inc. (PENG)

Return on equity (ROE)

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Net income	US$ in thousands	-52,472	-187,526	66,557	21,310	-1,143
Total stockholders’ equity	US$ in thousands	391,381	222,475	371,611	310,251	282,104
ROE		-13.41%	-84.29%	17.91%	6.87%	-0.41%

August 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-52,472K ÷ $391,381K
= -13.41%

The analysis of Penguin Solutions, Inc.'s Return on Equity (ROE) over the examined period reveals notable fluctuations and trends. As of August 31, 2020, the company's ROE stood at -0.41%, indicating a marginally negative return on shareholder equity, which suggests the company was operating with minimal or no profitability relative to its equity base at that time.

By August 31, 2021, the ROE improved significantly to 6.87%, transitioning into positive territory. This enhancement signals a period of improved profitability and more efficient utilization of shareholders' equity following the prior period of near breakeven.

The upward trend continued into August 31, 2022, with the ROE reaching 17.91%, representing a robust return and indicating that the company generated approximately 18 cents of net income for every dollar of equity. This level of ROE suggests strong operational performance and effective management during that fiscal year.

However, a stark reversal occurred by August 31, 2023, as the ROE plummeted to -84.29%. Such a dramatic decline signifies a significant deterioration in profitability, likely driven by net losses, substantial impairments, or extraordinary expenses that substantially reduced net income in relation to shareholders' equity. The negative figure indicates that the company was generating losses that outweighed its equity investment.

The most recent data as of August 31, 2024, demonstrates a partial recovery, with ROE recorded at -13.41%. Although still negative, this indicates an improvement from the previous year’s substantial loss, hinting at some degree of operational or financial stabilization, albeit not yet reaching positive profitability.

Overall, the ROE trajectory of Penguin Solutions, Inc. highlights periods of growth, subsequent severe setbacks, and partial recovery. The volatile pattern underscores underlying challenges in sustained profitability and suggests that the company’s financial performance has been subject to significant fluctuation over the analyzed timeframe.