Financial Survey: Penguin Solutions (NASDAQ:PENG) & Audioeye (NASDAQ:AEYE)

Penguin Solutions (NASDAQ:PENG) and Audioeye (NASDAQ:AEYE) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Penguin Solutions and Audioeye’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Penguin Solutions	-0.46%	13.15%	3.84%
Audioeye	-13.28%	36.54%	9.46%

Institutional & Insider Ownership

51.1% of Audioeye shares are held by institutional investors. 2.6% of Penguin Solutions shares are held by company insiders. Comparatively, 40.7% of Audioeye shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Penguin Solutions and Audioeye”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Penguin Solutions	$1.17 billion	0.95	-$52.47 million	($0.17)	-123.85
Audioeye	$35.20 million	4.24	-$4.25 million	($0.40)	-29.94

Audioeye has lower revenue, but higher earnings than Penguin Solutions. Penguin Solutions is trading at a lower price-to-earnings ratio than Audioeye, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Penguin Solutions and Audioeye, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Penguin Solutions	0	1	6	2	3.11
Audioeye	0	0	5	0	3.00

Penguin Solutions currently has a consensus target price of $24.94, indicating a potential upside of 18.44%. Audioeye has a consensus target price of $26.40, indicating a potential upside of 120.46%. Given Audioeye’s higher possible upside, analysts plainly believe Audioeye is more favorable than Penguin Solutions.

Risk and Volatility

Penguin Solutions has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, Audioeye has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Summary

Audioeye beats Penguin Solutions on 8 of the 15 factors compared between the two stocks.

About Penguin Solutions

Penguin Solutions, Inc. engages in the designing and development of enterprise solutions worldwide. It operates through three segments: Advanced Computing, Integrated Memory, and Optimized LED. It offers dynamic random access memory modules, solid-state and flash storage, and other advanced integrated memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services. The company also provides Penguin Computing that focus on technical computing for core and cloud environments through high-performance computing and AI solutions; and Penguin Edge, an edge computing solution for embedded and wireless applications, such as high-performance products for government, health care, manufacturing, and telecommunications applications. In addition, it offers Stratus, which provides simplified, protected, and autonomous fault tolerant computing solutions in the data center and at the Edge through hardware and software services; and solutions to education, energy, financial services, government, hyperscale, and manufacturing markets. Further, the company provides LED chip products comprising blue and green LED chips based on gallium nitride, and related materials under Cree LED brand; and surface mount devices under the Cree LED XLamp and J Series brands. It sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. The company was formerly known as SMART Global Holdings, Inc. and changed its name to Penguin Solutions, Inc. in October 2024. Penguin Solutions, Inc. was founded in 1988 and is based in Grand Cayman, Cayman Islands.

About Audioeye

AudioEye, Inc. provides patented, internet content publication, distribution software, and related services to Internet and other media to people regardless of their device, location, or disabilities in the United States. Its software and services enable conversion of digital content into accessible formats and allows for real time distribution to end users on any Internet connected device. The company offers AudioEye, an always-on testing, remediation, and monitoring solution that improves conformance with web content accessibility guidelines; identifies and fixes the accessibility errors and addresses a range of disabilities, including dyslexia, color blindness, epilepsy, and others; and provides additional solutions to provide for enhanced compliance and accessibility, including periodic auditing, human assisted technological remediations, and legal support services, as well as PDF remediation services, Native Mobile App and audit reports to help customers with their digital accessibility needs. The company serves small- and medium-sized businesses, corporate enterprises, non-profit organizations, and federal government agencies, as well as federal, state, and local governments and agencies through content management system partners, platform and agency partners, authorized resellers, and the marketplace. AudioEye, Inc. was incorporated in 2005 and is based in Tucson, Arizona.