HEWLETT PACKARD ENTERPRISE (HPE)
US42824C1099 - Common Stock
HPE gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPE belongs to the best of the industry regarding profitability, there are concerns on its financial health. HPE is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year HPE was profitable.
HPE had a positive operating cash flow in the past year.
Of the past 5 years HPE 4 years were profitable.
Each year in the past 5 years HPE had a positive operating cash flow.
1.2 Ratios
HPE has a Return On Assets of 3.26%. This is in the better half of the industry: HPE outperforms 62.50% of its industry peers.
Looking at the Return On Equity, with a value of 8.92%, HPE is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.99%, HPE is doing good in the industry, outperforming 65.63% of the companies in the same industry.
HPE had an Average Return On Invested Capital over the past 3 years of 4.94%. This is significantly below the industry average of 14.24%.
The last Return On Invested Capital (4.99%) for HPE is above the 3 year average (4.94%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.26% | ||
| ROE | 8.92% | ||
| ROIC | 4.99% |
ROA(3y)3.67%
ROA(5y)2.49%
ROE(3y)10.36%
ROE(5y)7.04%
ROIC(3y)4.94%
ROIC(5y)4.82%
1.3 Margins
HPE has a Profit Margin of 6.81%. This is amongst the best in the industry. HPE outperforms 81.25% of its industry peers.
HPE's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 8.28%, HPE is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
In the last couple of years the Operating Margin of HPE has grown nicely.
HPE's Gross Margin of 35.75% is fine compared to the rest of the industry. HPE outperforms 65.63% of its industry peers.
In the last couple of years the Gross Margin of HPE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.28% | ||
| PM (TTM) | 6.81% | ||
| GM | 35.75% |
OM growth 3Y12.51%
OM growth 5Y1.94%
PM growth 3YN/A
PM growth 5Y2.36%
GM growth 3Y3.84%
GM growth 5Y3.27%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HPE is destroying value.
HPE has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, HPE has less shares outstanding
The debt/assets ratio for HPE has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.85, we must say that HPE is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.85, HPE is doing worse than 65.63% of the companies in the same industry.
The Debt to FCF ratio of HPE is 4.86, which is a neutral value as it means it would take HPE, 4.86 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of HPE (4.86) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.40 indicates that HPE is not too dependend on debt financing.
HPE's Debt to Equity ratio of 0.40 is in line compared to the rest of the industry. HPE outperforms 40.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 4.86 | ||
| Altman-Z | 0.85 |
ROIC/WACC0.53
WACC9.41%
2.3 Liquidity
A Current Ratio of 0.89 indicates that HPE may have some problems paying its short term obligations.
With a Current ratio value of 0.89, HPE is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
HPE has a Quick Ratio of 0.89. This is a bad value and indicates that HPE is not financially healthy enough and could expect problems in meeting its short term obligations.
HPE has a Quick ratio of 0.63. This is amonst the worse of the industry: HPE underperforms 90.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
The earnings per share for HPE have decreased by -5.19% in the last year.
HPE shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.59% yearly.
Looking at the last year, HPE shows a decrease in Revenue. The Revenue has decreased by -4.30% in the last year.
HPE shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.14% yearly.
EPS 1Y (TTM)-5.19%
EPS 3Y16.96%
EPS 5Y6.59%
EPS growth Q2Q-23.81%
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y2.59%
Revenue growth 5Y-1.14%
Revenue growth Q2Q-13.5%
3.2 Future
Based on estimates for the next years, HPE will show a small growth in Earnings Per Share. The EPS will grow by 4.69% on average per year.
HPE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.12% yearly.
EPS Next Y-12.2%
EPS Next 2Y-2.3%
EPS Next 3Y-0.76%
EPS Next 5Y4.69%
Revenue Next Year0.09%
Revenue Next 2Y2.17%
Revenue Next 3Y2.17%
Revenue Next 5Y2.12%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.89, which indicates a very decent valuation of HPE.
Based on the Price/Earnings ratio, HPE is valued cheaper than 90.63% of the companies in the same industry.
HPE's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
Based on the Price/Forward Earnings ratio of 8.66, the valuation of HPE can be described as reasonable.
87.50% of the companies in the same industry are more expensive than HPE, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, HPE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.89 | ||
| Fwd PE | 8.66 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HPE indicates a rather cheap valuation: HPE is cheaper than 87.50% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, HPE is valued cheaper than 84.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.82 | ||
| EV/EBITDA | 6.36 |
4.3 Compensation for Growth
HPE has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.35
EPS Next 2Y-2.3%
EPS Next 3Y-0.76%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.91%, HPE has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.76, HPE pays a better dividend. On top of this HPE pays more dividend than 90.63% of the companies listed in the same industry.
HPE's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
5.2 History
The dividend of HPE has a limited annual growth rate of 5.03%.
HPE has been paying a dividend for at least 10 years, so it has a reliable track record.
HPE has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)5.03%
Div Incr Years1
Div Non Decr Years8
5.3 Sustainability
33.07% of the earnings are spent on dividend by HPE. This is a low number and sustainable payout ratio.
The dividend of HPE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.07%
EPS Next 2Y-2.3%
EPS Next 3Y-0.76%
HEWLETT PACKARD ENTERPRISE
NYSE:HPE (5/17/2024, 7:04:24 PM)
After market: 17.89 +0.03 (+0.17%)17.86
-0.03 (-0.17%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap23.22B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.89 | ||
| Fwd PE | 8.66 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.26% | ||
| ROE | 8.92% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.28% | ||
| PM (TTM) | 6.81% | ||
| GM | 35.75% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.63 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-5.19%
EPS 3Y16.96%
EPS 5Y
EPS growth Q2Q
EPS Next Y-12.2%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y2.59%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y