HEWLETT PACKARD ENTERPRISE (HPE)
US42824C1099 - Common Stock
We assign a fundamental rating of 5 out of 10 to HPE. HPE was compared to 31 industry peers in the Technology Hardware, Storage & Peripherals industry. HPE scores excellent on profitability, but 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
HPE had positive earnings in the past year.
In the past year HPE had a positive cash flow from operations.
In multiple years HPE reported negative net income over the last 5 years.
HPE had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.05%, HPE is in the better half of the industry, outperforming 67.74% of the companies in the same industry.
Looking at the Return On Equity, with a value of 8.40%, HPE belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
The Return On Invested Capital of HPE (4.76%) is better than 61.29% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HPE is significantly below the industry average of 15.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.05% | ||
| ROE | 8.4% | ||
| ROIC | 4.76% |
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's Profit Margin of 6.39% is amongst the best of the industry. HPE outperforms 80.65% of its industry peers.
In the last couple of years the Profit Margin of HPE has grown nicely.
HPE has a better Operating Margin (7.83%) than 70.97% of its industry peers.
In the last couple of years the Operating Margin of HPE has grown nicely.
HPE's Gross Margin of 33.88% is fine compared to the rest of the industry. HPE outperforms 61.29% of its industry peers.
In the last couple of years the Gross Margin of HPE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.83% | ||
| PM (TTM) | 6.39% | ||
| GM | 33.88% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HPE is destroying value.
There is no outstanding debt for HPE. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
HPE has an Altman-Z score of 0.93. This is a bad value and indicates that HPE is not financially healthy and even has some risk of bankruptcy.
HPE has a worse Altman-Z score (0.93) than 70.97% of its industry peers.
The Debt to FCF ratio of HPE is 4.34, which is a neutral value as it means it would take HPE, 4.34 years of fcf income to pay off all of its debts.
HPE has a Debt to FCF ratio of 4.34. This is in the better half of the industry: HPE outperforms 70.97% of its industry peers.
HPE has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.39, HPE perfoms like the industry average, outperforming 51.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 4.34 | ||
| Altman-Z | 0.93 |
ROIC/WACC0.42
WACC11.42%
2.3 Liquidity
A Current Ratio of 0.94 indicates that HPE may have some problems paying its short term obligations.
The Current ratio of HPE (0.94) is worse than 80.65% of its industry peers.
HPE has a Quick Ratio of 0.94. This is a bad value and indicates that HPE is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of HPE (0.62) is worse than 87.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The earnings per share for HPE have decreased by -8.33% in the last year.
The Earnings Per Share has been growing slightly by 2.15% on average over the past years.
EPS 1Y (TTM)-8.33%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%11.54%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%15.06%
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 2.98% on average per year.
HPE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.43% yearly.
EPS Next Y7.61%
EPS Next 2Y7.04%
EPS Next 3Y5.85%
EPS Next 5Y2.98%
Revenue Next Year7.43%
Revenue Next 2Y5.79%
Revenue Next 3Y4.9%
Revenue Next 5Y5.43%
3.3 Evolution
The EPS 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
Based on the Price/Earnings ratio of 10.40, the valuation of HPE can be described as reasonable.
HPE's Price/Earnings ratio is rather cheap when compared to the industry. HPE is cheaper than 83.87% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.83, HPE is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 9.66, the valuation of HPE can be described as reasonable.
Based on the Price/Forward Earnings ratio, HPE is valued cheaper than 80.65% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HPE to the average of the S&P500 Index (22.65), we can say HPE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.4 | ||
| Fwd PE | 9.66 |
4.2 Price Multiples
93.55% of the companies in the same industry are more expensive than HPE, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, HPE is valued cheaply inside the industry as 93.55% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.82 | ||
| EV/EBITDA | 7.29 |
4.3 Compensation for Growth
HPE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of HPE may justify a higher PE ratio.
PEG (NY)1.37
PEG (5Y)4.83
EPS Next 2Y7.04%
EPS Next 3Y5.85%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.38%, HPE has a reasonable but not impressive dividend return.
HPE's Dividend Yield is rather good when compared to the industry average which is at 2.91. HPE pays more dividend than 90.32% of the companies in the same industry.
HPE's Dividend Yield is comparable with the S&P500 average which is at 2.24.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
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.
As HPE did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)5.03%
Div Incr Years1
Div Non Decr Years8
5.3 Sustainability
35.63% of the earnings are spent on dividend by HPE. This is a low number and sustainable payout ratio.
HPE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.63%
EPS Next 2Y7.04%
EPS Next 3Y5.85%
HEWLETT PACKARD ENTERPRISE
NYSE:HPE (12/18/2024, 8:27:49 PM)
After market: 20.61 +0.02 (+0.1%)20.59
-0.95 (-4.41%)
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 Cap26.71B
Analysts
Price Target
Short Float %
Short Ratio
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
Dividend Growth(5Y)
DP
Div Incr Years
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Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.4 | ||
| Fwd PE | 9.66 | ||
| 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)1.37
PEG (5Y)4.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.05% | ||
| ROE | 8.4% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7.83% | ||
| PM (TTM) | 6.39% | ||
| GM | 33.88% | ||
| 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 | 0.39 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.62 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)-8.33%
EPS 3Y0.17%
EPS 5Y
EPS Q2Q%
EPS Next Y7.61%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5Y
Sales 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