Penguin Solutions, Inc. (PENG)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 23,237 | 34,307 | 12,050 | -2,789 | 17,860 | 4,050 | -7,774 | 6,554 | 24,419 | 61,918 | 92,322 | 109,672 | 116,640 | 84,286 | 80,675 | 55,572 | 39,200 | 43,414 | 27,775 | 24,360 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| 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 |
| Return on total capital | 3.97% | 5.69% | 3.01% | -0.71% | 4.22% | 1.00% | -1.90% | 2.95% | 7.68% | 19.00% | 26.22% | 29.51% | 29.71% | 24.16% | 24.98% | 17.91% | 14.55% | 16.79% | 9.98% | 8.64% |
May 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $23,237K ÷ ($—K + $584,771K)
= 3.97%
The analysis of Penguin Solutions, Inc.’s return on total capital (ROTC) over the specified periods reveals significant fluctuations indicative of varying operational performance and strategic factors influencing profitability.
Between August 31, 2020, and November 30, 2021, the company experienced a notable upward trajectory in ROTC. Starting at 8.64%, the ratio increased consistently, reaching a peak of 24.98% on November 30, 2021. This upward trend suggests an improvement in overall efficiency in generating returns from the total capital employed, likely driven by enhanced operational performance or effective capital utilization during this period.
From the end of 2021 into mid-2022, the ROTC maintained high levels, recording 24.16% in February 2022 and climbing further to 29.71% by May 2022. These peaks further underscore periods of robust profitability and efficient use of capital resources.
However, post-May 2022, a gradual decline is observed. The ROTC decreased marginally to 29.51% in August 2022, then continued to decline to 26.22% by November 2022. The downward trend became more significant in early 2023, with a notable reduction to 19.00% in February 2023 and a sharp decline to 7.68% by May 2023. This suggests a potential contraction in profitability or increased capital costs during this phase.
The most dramatic shift is observed thereafter. The ratio declined sharply into negative territory, registering at -1.90% on November 30, 2023, indicating that the company's returns on total capital turned insufficient to cover its costs, implying potential operational challenges or increased expenses. The following periods show some recovery, with slight positive returns of 1.00% on February 29, 2024, and 4.22% on May 31, 2024.
Most recent data up to May 2025 indicates some stabilization, with the ROTC fluctuating around modest positive figures—3.01% on November 30, 2024, rising to 5.69% on February 28, 2025, and slightly decreasing to 3.97% by May 31, 2025.
Overall, the trend suggests that Penguin Solutions, Inc. experienced a period of strong profitability and efficient capital utilization from late 2020 through mid-2022, followed by a period of significant decline, including negative returns, indicating potential financial or operational difficulties. The most recent figures reflect a partial recovery, although the company continues to face challenges in maintaining high profitability levels on its total capital base.
Peer comparison
May 31, 2025