Penguin Solutions, Inc. (PENG)

Return on equity (ROE)

		May 31, 2025	Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020
Net income (ttm)	US$ in thousands	-8,587	-5,632	-27,334	-52,472	-168,769	-198,840	-212,439	-187,526	-26,723	21,845	51,522	66,557	67,248	35,924	39,310	21,310	8,188	16,224	660	-1,143
Total stockholders’ equity	US$ in thousands	584,771	602,528	400,375	391,381	423,449	405,042	410,160	222,475	318,097	325,829	352,120	371,611	392,602	348,827	322,940	310,251	269,433	258,559	278,318	282,104
ROE		-1.47%	-0.93%	-6.83%	-13.41%	-39.86%	-49.09%	-51.79%	-84.29%	-8.40%	6.70%	14.63%	17.91%	17.13%	10.30%	12.17%	6.87%	3.04%	6.27%	0.24%	-0.41%

May 31, 2025 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $-8,587K ÷ $584,771K
= -1.47%

The analysis of Penguin Solutions, Inc.'s return on equity (ROE) over the specified period reveals a markedly volatile performance trajectory. Initially, the company experienced a negative ROE of -0.41% as of August 31, 2020, indicating a slight erosion of shareholder equity. This was followed by a modest positive shift to 0.24% in November 2020, suggesting a marginal improvement in profitability relative to shareholders' equity.

Subsequently, the ROE demonstrated a significant upward trend, reaching 6.27% by February 28, 2021, and maintaining positive figures through May 31, 2021 (3.04%), August 31, 2021 (6.87%), and peaking at 12.17% in November 2021. A further increase ensued, with ROE rising to 10.30% in February 2022, and reaching an apex of 17.13% on May 31, 2022. The positive momentum persisted into August 2022, with ROE at 17.91%, before a decline set in—yet remaining positive at 14.63% by November 2022.

However, this trend reversed sharply in early 2023, with ROE decreasing to 6.70% in February before turning negative in subsequent periods. By May 2023, the ROE had fallen to -8.40%, indicating a reversal from prior profitability. The decline accelerated dramatically, with a substantial negative ROE of -84.29% recorded on August 31, 2023, reflecting either significant losses or accounting adjustments affecting equity. The negative trend persisted into the following months: -51.79% in November 2023, -49.09% in February 2024, and -39.86% in May 2024.

Although there was some improvement in the latter period, with ROE at -13.41% on August 31, 2024, and -6.83% on November 30, 2024, the company continued to operate with a negative ROE, albeit at reduced levels. The trend remained negative through the subsequent quarters, with ROE approaching closer to zero but still in negative territory—-0.93% in February 2025 and -1.47% in May 2025.

In summary, Penguin Solutions, Inc. experienced a period of recovery and positive profitability from late 2020 through late 2022, reaching double-digit ROE levels, which generally indicates efficient utilization of shareholders' equity during that period. However, starting in early 2023, the company encountered a sharp deterioration in profitability, culminating in significant negative ROE figures, indicative of losses and diminishing shareholder value. The persistent negative ROE in recent periods suggests ongoing challenges in sustaining profitability, and a return to positive ROE levels appears distant based on the current trend data.