Head to Head Survey: Kingsoft Cloud (NASDAQ:KC) and Penguin Solutions (NASDAQ:PENG)

Kingsoft Cloud (NASDAQ:KC) and Penguin Solutions (NASDAQ:PENG) are both mid-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Profitability

This table compares Kingsoft Cloud and Penguin Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kingsoft Cloud	-9.38%	-11.67%	-3.59%
Penguin Solutions	4.07%	19.94%	5.33%

Institutional and Insider Ownership

13.4% of Kingsoft Cloud shares are held by institutional investors. 14.2% of Kingsoft Cloud shares are held by company insiders. Comparatively, 2.9% of Penguin Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Kingsoft Cloud and Penguin Solutions”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kingsoft Cloud	$1.37 billion	2.58	-$133.88 million	($0.47)	-24.87
Penguin Solutions	$1.37 billion	2.22	$25.39 million	$0.72	83.14

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

Risk and Volatility

Kingsoft Cloud has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500. Comparatively, Penguin Solutions has a beta of 2.89, suggesting that its share price is 189% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Kingsoft Cloud and Penguin Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kingsoft Cloud	1	1	4	0	2.50
Penguin Solutions	0	4	6	0	2.60

Kingsoft Cloud presently has a consensus target price of $18.53, suggesting a potential upside of 58.54%. Penguin Solutions has a consensus target price of $36.88, suggesting a potential downside of 38.40%. Given Kingsoft Cloud’s higher probable upside, research analysts plainly believe Kingsoft Cloud is more favorable than Penguin Solutions.

Summary

Penguin Solutions beats Kingsoft Cloud on 10 of the 14 factors compared between the two stocks.

About Kingsoft Cloud

Kingsoft Cloud Holdings Limited provides cloud services to businesses and organizations primarily in China. The company's products portfolio includes cloud products, including infrastructure as a service (IaaS) infrastructure, platform as a service (PaaS) middleware, and software as a service (SaaS) applications that primarily consist of cloud computing, network, database, big data, security, storage, and delivery solutions. It offers research and development services, as well as enterprise digital solutions and related services. The company also provides public cloud services to customers in various verticals, including video, e-commerce, intelligent mobility, artificial intelligence, and mobile internet; and enterprise cloud services to customers in financial services, public service, and healthcare businesses. Kingsoft Cloud Holdings Limited was incorporated in 2012 and is headquartered in Beijing, the People's Republic of China.

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.