HEWLETT PACKARD ENTERPRISE (2HP.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:2HP - US42824C1099 - Common Stock
17.912 EUR
-0.68 (-3.65%)
Overall 2HP gets a fundamental rating of 3 out of 10. We evaluated 2HP against 31 industry peers in the Technology Hardware, Storage & Peripherals industry. Both the profitability and financial health of 2HP have multiple concerns. 2HP is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- 2HP had positive earnings in the past year.
- In the past year 2HP had a positive cash flow from operations.
- Of the past 5 years 2HP 4 years were profitable.
- 2HP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of -0.08%, 2HP is doing worse than 61.29% of the companies in the same industry.
- With a Return On Equity value of -0.24%, 2HP perfoms like the industry average, outperforming 51.61% of the companies in the same industry.
- 2HP has a Return On Invested Capital (2.80%) which is comparable to the rest of the industry.
- 2HP had an Average Return On Invested Capital over the past 3 years of 4.48%. This is significantly below the industry average of 16.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.08% | ||
| ROE | -0.24% | ||
| ROIC | 2.8% |
ROA(3y)2.35%
ROA(5y)2.9%
ROE(3y)6.54%
ROE(5y)8.23%
ROIC(3y)4.48%
ROIC(5y)4.78%
1.3 Margins
- With a Operating Margin value of 4.79%, 2HP perfoms like the industry average, outperforming 51.61% of the companies in the same industry.
- In the last couple of years the Operating Margin of 2HP has declined.
- The Gross Margin of 2HP (30.26%) is comparable to the rest of the industry.
- 2HP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.79% | ||
| PM (TTM) | N/A | ||
| GM | 30.26% |
OM growth 3Y-15.03%
OM growth 5Y-4.02%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.2%
GM growth 5Y-0.73%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 2HP is destroying value.
- Compared to 1 year ago, 2HP has more shares outstanding
- 2HP has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for 2HP is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.80, we must say that 2HP is in the distress zone and has some risk of bankruptcy.
- 2HP's Altman-Z score of 0.80 is on the low side compared to the rest of the industry. 2HP is outperformed by 67.74% of its industry peers.
- The Debt to FCF ratio of 2HP is 35.67, which is on the high side as it means it would take 2HP, 35.67 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 35.67, 2HP is doing worse than 67.74% of the companies in the same industry.
- A Debt/Equity ratio of 0.72 indicates that 2HP is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.72, 2HP is doing worse than 64.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 35.67 | ||
| Altman-Z | 0.8 |
ROIC/WACC0.41
WACC6.79%
2.3 Liquidity
- A Current Ratio of 1.01 indicates that 2HP should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.01, 2HP is doing worse than 70.97% of the companies in the same industry.
- A Quick Ratio of 0.76 indicates that 2HP may have some problems paying its short term obligations.
- 2HP has a Quick ratio of 0.76. This is in the lower half of the industry: 2HP underperforms 74.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
- 2HP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.53%.
- 2HP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.41% yearly.
- Looking at the last year, 2HP shows a quite strong growth in Revenue. The Revenue has grown by 13.84% in the last year.
- The Revenue has been growing slightly by 4.91% on average over the past years.
EPS 1Y (TTM)-2.53%
EPS 3Y-1.51%
EPS 5Y7.41%
EPS Q2Q%6.9%
Revenue 1Y (TTM)13.84%
Revenue growth 3Y6.37%
Revenue growth 5Y4.91%
Sales Q2Q%14.44%
3.2 Future
- 2HP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.81% yearly.
- The Revenue is expected to grow by 7.54% on average over the next years.
EPS Next Y23.86%
EPS Next 2Y19.73%
EPS Next 3Y17.12%
EPS Next 5Y15.81%
Revenue Next Year18.19%
Revenue Next 2Y11.82%
Revenue Next 3Y9.25%
Revenue Next 5Y7.54%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 10.92 indicates a reasonable valuation of 2HP.
- 2HP's Price/Earnings ratio is a bit cheaper when compared to the industry. 2HP is cheaper than 77.42% of the companies in the same industry.
- 2HP is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 8.80, the valuation of 2HP can be described as reasonable.
- Based on the Price/Forward Earnings ratio, 2HP is valued cheaper than 80.65% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of 2HP to the average of the S&P500 Index (25.98), we can say 2HP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.92 | ||
| Fwd PE | 8.8 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 2HP indicates a somewhat cheap valuation: 2HP is cheaper than 67.74% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of 2HP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.26 | ||
| EV/EBITDA | 10.12 |
4.3 Compensation for Growth
- 2HP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- A more expensive valuation may be justified as 2HP's earnings are expected to grow with 17.12% in the coming years.
PEG (NY)0.46
PEG (5Y)1.47
EPS Next 2Y19.73%
EPS Next 3Y17.12%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.67%, 2HP has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.91, 2HP pays a better dividend. On top of this 2HP pays more dividend than 87.10% of the companies listed in the same industry.
- 2HP's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
- The dividend of 2HP has a limited annual growth rate of 4.91%.
Dividend Growth(5Y)4.91%
Div Incr Years2
Div Non Decr Years5
5.3 Sustainability
- The earnings of 2HP are negative and hence is the payout ratio. 2HP will probably not be able to sustain this dividend level.
- 2HP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-1349.15%
EPS Next 2Y19.73%
EPS Next 3Y17.12%
HEWLETT PACKARD ENTERPRISE / 2HP.DE FAQ
Can you provide the ChartMill fundamental rating for HEWLETT PACKARD ENTERPRISE?
ChartMill assigns a fundamental rating of 3 / 10 to 2HP.DE.
What is the valuation status of HEWLETT PACKARD ENTERPRISE (2HP.DE) stock?
ChartMill assigns a valuation rating of 6 / 10 to HEWLETT PACKARD ENTERPRISE (2HP.DE). This can be considered as Fairly Valued.
How profitable is HEWLETT PACKARD ENTERPRISE (2HP.DE) stock?
HEWLETT PACKARD ENTERPRISE (2HP.DE) has a profitability rating of 3 / 10.
What is the valuation of HEWLETT PACKARD ENTERPRISE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for HEWLETT PACKARD ENTERPRISE (2HP.DE) is 10.92 and the Price/Book (PB) ratio is 1.12.
What is the earnings growth outlook for HEWLETT PACKARD ENTERPRISE?
The Earnings per Share (EPS) of HEWLETT PACKARD ENTERPRISE (2HP.DE) is expected to grow by 23.86% in the next year.