HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
NYSE:HPE - New York Stock Exchange, Inc. - US42824C1099 - Common Stock
Taking everything into account, HPE scores 5 out of 10 in our fundamental rating. HPE was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPE is still in line with the averages on profitability rating, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on HPE.
1. Profitability
1.1 Basic Checks
In the past year HPE was profitable.
In the past year HPE had a positive cash flow from operations.
HPE had positive earnings in 4 of the past 5 years.
Each year in the past 5 years HPE had a positive operating cash flow.
1.2 Ratios
HPE's Return On Assets of 3.58% is fine compared to the rest of the industry. HPE outperforms 70.97% of its industry peers.
The Return On Equity of HPE (10.29%) is better than 83.87% of its industry peers.
With a decent Return On Invested Capital value of 4.82%, HPE is doing good in the industry, outperforming 61.29% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HPE is significantly below the industry average of 16.39%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.58% | ||
| ROE | 10.29% | ||
| ROIC | 4.82% |
ROA(3y)2.88%
ROA(5y)2.8%
ROE(3y)8.07%
ROE(5y)7.88%
ROIC(3y)5.52%
ROIC(5y)5.09%
1.3 Margins
Looking at the Profit Margin, with a value of 8.48%, HPE belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
In the last couple of years the Profit Margin of HPE has grown nicely.
With a decent Operating Margin value of 8.28%, HPE is doing good in the industry, outperforming 74.19% of the companies in the same industry.
HPE's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 32.79%, HPE perfoms like the industry average, outperforming 58.06% of the companies in the same industry.
In the last couple of years the Gross Margin of HPE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.28% | ||
| PM (TTM) | 8.48% | ||
| GM | 32.79% |
OM growth 3Y2.85%
OM growth 5Y-0.53%
PM growth 3Y-11.75%
PM growth 5Y18.68%
GM growth 3Y-0.96%
GM growth 5Y0.13%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HPE is destroying value.
Compared to 1 year ago, HPE has more shares outstanding
HPE has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, HPE has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.02, we must say that HPE is in the distress zone and has some risk of bankruptcy.
HPE has a worse Altman-Z score (1.02) than 70.97% of its industry peers.
The Debt to FCF ratio of HPE is 9.24, which is on the high side as it means it would take HPE, 9.24 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.24, HPE is in line with its industry, outperforming 58.06% of the companies in the same industry.
HPE has a Debt/Equity ratio of 0.58. This is a neutral value indicating HPE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.58, HPE is in line with its industry, outperforming 45.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 9.24 | ||
| Altman-Z | 1.02 |
ROIC/WACC0.42
WACC11.36%
2.3 Liquidity
HPE has a Current Ratio of 1.29. This is a normal value and indicates that HPE is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.29, HPE is not doing good in the industry: 64.52% of the companies in the same industry are doing better.
HPE has a Quick Ratio of 1.29. This is a bad value and indicates that HPE is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.99, HPE is in line with its industry, outperforming 51.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
HPE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.33%.
HPE shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.15% yearly.
The Revenue has been growing slightly by 3.40% in the past year.
Measured over the past years, HPE shows a small growth in Revenue. The Revenue has been growing by 0.67% on average per year.
EPS 1Y (TTM)-8.33%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%11.54%
Revenue 1Y (TTM)3.4%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
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.
Based on estimates for the next years, HPE will show a small growth in Revenue. The Revenue will grow by 5.43% on average per year.
EPS Next Y8.02%
EPS Next 2Y7.41%
EPS Next 3Y5.91%
EPS Next 5Y2.98%
Revenue Next Year8.81%
Revenue Next 2Y6.77%
Revenue Next 3Y5.55%
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.
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 11.97, which indicates a very decent valuation of HPE.
83.87% of the companies in the same industry are more expensive than HPE, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of HPE to the average of the S&P500 Index (28.29), we can say HPE is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.08, the valuation of HPE can be described as reasonable.
Based on the Price/Forward Earnings ratio, HPE is valued a bit cheaper than the industry average as 74.19% of the companies are valued more expensively.
HPE is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.97 | ||
| Fwd PE | 11.08 |
4.2 Price Multiples
HPE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HPE is cheaper than 93.55% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HPE is valued cheaply inside the industry as 80.65% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.79 | ||
| EV/EBITDA | 6.54 |
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)1.49
PEG (5Y)5.56
EPS Next 2Y7.41%
EPS Next 3Y5.91%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 2.22%. Purely for dividend investing, there may be better candidates out there.
HPE's Dividend Yield is rather good when compared to the industry average which is at 2.93. HPE pays more dividend than 90.32% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, HPE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
5.2 History
The dividend of HPE has a limited annual growth rate of 3.20%.
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)3.2%
Div Incr Years1
Div Non Decr Years8
5.3 Sustainability
HPE pays out 26.47% of its income as dividend. This is a sustainable payout ratio.
The dividend of HPE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP26.47%
EPS Next 2Y7.41%
EPS Next 3Y5.91%
HEWLETT PACKARD ENTERPRISE
NYSE:HPE (1/21/2025, 6:45:31 PM)
After market: 24 +0.3 (+1.27%)23.7
+0.56 (+2.42%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners83.84%
Inst Owner Change0.25%
Ins Owners0.37%
Ins Owner Change7.05%
Market Cap31.17B
Analysts78.18
Price Target24.11 (1.73%)
Short Float %2.19%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend0.52
Dividend Growth(5Y)3.2%
DP26.47%
Div Incr Years1
Div Non Decr Years8
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.42%
Min EPS beat(2)3.05%
Max EPS beat(2)5.8%
EPS beat(4)4
Avg EPS beat(4)5.28%
Min EPS beat(4)3.05%
Max EPS beat(4)6.92%
EPS beat(8)8
Avg EPS beat(8)6.24%
EPS beat(12)10
Avg EPS beat(12)4.97%
EPS beat(16)14
Avg EPS beat(16)6.81%
Revenue beat(2)1
Avg Revenue beat(2)0.46%
Min Revenue beat(2)-0.52%
Max Revenue beat(2)1.43%
Revenue beat(4)2
Avg Revenue beat(4)-0.13%
Min Revenue beat(4)-5.97%
Max Revenue beat(4)4.54%
Revenue beat(8)3
Avg Revenue beat(8)-0.49%
Revenue beat(12)4
Avg Revenue beat(12)-0.34%
Revenue beat(16)6
Avg Revenue beat(16)-0.37%
PT rev (1m)5.79%
PT rev (3m)13.49%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.29%
EPS NY rev (1m)0%
EPS NY rev (3m)1.88%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.25%
Revenue NY rev (1m)0.57%
Revenue NY rev (3m)1.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.97 | ||
| Fwd PE | 11.08 | ||
| P/S | 1.03 | ||
| P/FCF | 15.79 | ||
| P/OCF | 7.18 | ||
| P/B | 1.26 | ||
| P/tB | 5.01 | ||
| EV/EBITDA | 6.54 |
EPS(TTM)1.98
EY8.35%
EPS(NY)2.14
Fwd EY9.02%
FCF(TTM)1.5
FCFY6.33%
OCF(TTM)3.3
OCFY13.93%
SpS22.9
BVpS18.87
TBVpS4.73
PEG (NY)1.49
PEG (5Y)5.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.58% | ||
| ROE | 10.29% | ||
| ROCE | 5.51% | ||
| ROIC | 4.82% | ||
| ROICexc | 7.12% | ||
| ROICexgc | 17.6% | ||
| OM | 8.28% | ||
| PM (TTM) | 8.48% | ||
| GM | 32.79% | ||
| FCFM | 6.55% |
ROA(3y)2.88%
ROA(5y)2.8%
ROE(3y)8.07%
ROE(5y)7.88%
ROIC(3y)5.52%
ROIC(5y)5.09%
ROICexc(3y)6.82%
ROICexc(5y)6.08%
ROICexgc(3y)16.7%
ROICexgc(5y)14.78%
ROCE(3y)6.33%
ROCE(5y)5.84%
ROICexcg growth 3Y10.99%
ROICexcg growth 5Y-3.59%
ROICexc growth 3Y8.67%
ROICexc growth 5Y-0.74%
OM growth 3Y2.85%
OM growth 5Y-0.53%
PM growth 3Y-11.75%
PM growth 5Y18.68%
GM growth 3Y-0.96%
GM growth 5Y0.13%
F-Score5
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 9.24 | ||
| Debt/EBITDA | 2.82 | ||
| Cap/Depr | 92.32% | ||
| Cap/Sales | 7.86% | ||
| Interest Coverage | 3.23 | ||
| Cash Conversion | 85.82% | ||
| Profit Quality | 77.29% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 1.02 |
F-Score5
WACC11.36%
ROIC/WACC0.42
Cap/Depr(3y)108.77%
Cap/Depr(5y)102.69%
Cap/Sales(3y)9.51%
Cap/Sales(5y)9.27%
Profit Quality(3y)108.59%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.33%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%11.54%
EPS Next Y8.02%
EPS Next 2Y7.41%
EPS Next 3Y5.91%
EPS Next 5Y2.98%
Revenue 1Y (TTM)3.4%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%15.06%
Revenue Next Year8.81%
Revenue Next 2Y6.77%
Revenue Next 3Y5.55%
Revenue Next 5Y5.43%
EBIT growth 1Y2.13%
EBIT growth 3Y5.66%
EBIT growth 5Y0.14%
EBIT Next Year92.54%
EBIT Next 3Y28.01%
EBIT Next 5Y23.39%
FCF growth 1Y23.38%
FCF growth 3Y-16.32%
FCF growth 5Y11.59%
OCF growth 1Y-1.96%
OCF growth 3Y-9.57%
OCF growth 5Y1.66%