Penumbra Inc. Common Stock (PEN)

FairStock Score: 43/100 — MIXED

Key Financials

Strengths

• Generates $93 million in annual free cash flow (0.7% yield on market cap)
• Solid return on equity of 13.8% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.15, providing financial flexibility
• Altman Z-Score of 20.9 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 22.1% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($61) with negative 448% margin of safety—limited downside protection

AI Analysis

Penumbra Inc. Common Stock is a mid-cap healthcare company valued at $13.1 billion. The business generates $1.4 billion in annual revenue with a 3.4% net margin and $93 million in free cash flow. From a quality standpoint, Penumbra shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 20.9 confirms fortress-level solvency. On valuation, the stock is commanding a steep 73.7x multiple, with trades far above its Graham Number ($61) with no margin of safety. Growth dynamics show revenue growing at 22.1% and profit growth of 40.5%. Our composite FairStock Score of 43/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Penumbra's 22% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $93 million in annual free cash flow (0.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 74x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer