HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HPE - US42824C1099 - Common Stock
22.17 USD
+0.15 (+0.68%)
22.22 USD
+0.05 (+0.23%)
HPE gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 35 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.
HPE had a positive operating cash flow in the past year.
HPE had positive earnings in 4 of the past 5 years.
HPE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HPE has a better Return On Assets (-0.08%) than 65.71% of its industry peers.
Looking at the Return On Equity, with a value of -0.24%, HPE is in the better half of the industry, outperforming 77.14% of the companies in the same industry.
HPE has a better Return On Invested Capital (2.80%) than 65.71% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HPE is significantly below the industry average of 16.06%.
| 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
HPE has a better Operating Margin (4.79%) than 65.71% of its industry peers.
HPE's Operating Margin has declined in the last couple of years.
The Gross Margin of HPE (30.26%) is comparable to the rest of the 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 | 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
The debt/assets ratio for HPE is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.82, we must say that HPE is in the distress zone and has some risk of bankruptcy.
HPE has a Altman-Z score of 0.82. This is comparable to the rest of the industry: HPE outperforms 42.86% of its industry peers.
The Debt to FCF ratio of HPE is 35.67, which is on the high side as it means it would take HPE, 35.67 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 35.67, HPE perfoms like the industry average, outperforming 48.57% of the companies in the same industry.
A Debt/Equity ratio of 0.72 indicates that HPE is somewhat dependend on debt financing.
HPE has a Debt to Equity ratio (0.72) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 35.67 | ||
| Altman-Z | 0.82 |
ROIC/WACC0.4
WACC7%
2.3 Liquidity
HPE has a Current Ratio of 1.01. This is a normal value and indicates that HPE is financially healthy and should not expect problems in meeting its short term obligations.
HPE's Current ratio of 1.01 is on the low side compared to the rest of the industry. HPE is outperformed by 62.86% of its industry peers.
HPE has a Quick Ratio of 1.01. 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 (0.76) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
HPE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.53%.
The Earnings Per Share has been growing slightly by 7.41% on average over the past years.
The Revenue has grown by 13.84% in the past year. This is quite good.
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
Based on estimates for the next years, HPE will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.07% on average per year.
The Revenue is expected to grow by 8.07% on average over the next years. This is quite good.
EPS Next Y23.77%
EPS Next 2Y19.75%
EPS Next 3Y17.21%
EPS Next 5Y15.07%
Revenue Next Year18.14%
Revenue Next 2Y11.82%
Revenue Next 3Y9.25%
Revenue Next 5Y8.07%
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
HPE is valuated reasonably with a Price/Earnings ratio of 11.49.
Compared to the rest of the industry, the Price/Earnings ratio of HPE indicates a rather cheap valuation: HPE is cheaper than 97.14% of the companies listed in the same industry.
HPE's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.19.
The Price/Forward Earnings ratio is 9.28, which indicates a very decent valuation of HPE.
Based on the Price/Forward Earnings ratio, HPE is valued cheaper than 85.71% of the companies in the same industry.
HPE's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.49 | ||
| Fwd PE | 9.28 |
4.2 Price Multiples
HPE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HPE is cheaper than 85.71% of the companies in the same industry.
HPE's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.65 | ||
| EV/EBITDA | 10.42 |
4.3 Compensation for Growth
HPE'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 HPE's earnings are expected to grow with 17.21% in the coming years.
PEG (NY)0.48
PEG (5Y)1.55
EPS Next 2Y19.75%
EPS Next 3Y17.21%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 2.59%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.63, HPE pays a better dividend. On top of this HPE pays more dividend than 91.43% of the companies listed in the same industry.
HPE's Dividend Yield is a higher than the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
5.2 History
The dividend of HPE has a limited annual growth rate of 4.91%.
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)4.91%
Div Incr Years2
Div Non Decr Years9
5.3 Sustainability
The earnings of HPE are negative and hence is the payout ratio. HPE will probably not be able to sustain this dividend level.
The dividend of HPE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-1349.15%
EPS Next 2Y19.75%
EPS Next 3Y17.21%
22.17
+0.15 (+0.68%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners90.03%
Inst Owner Change0%
Ins Owners0.39%
Ins Owner Change-1.53%
Market Cap29.25B
Revenue(TTM)34.30B
Net Income(TTM)-59.00M
Analysts74.62
Price Target26.45 (19.31%)
Short Float %5.18%
Short Ratio2.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
Yearly Dividend0.61
Dividend Growth(5Y)4.91%
DP-1349.15%
Div Incr Years2
Div Non Decr Years9
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.29%
Min EPS beat(2)1.17%
Max EPS beat(2)5.42%
EPS beat(4)3
Avg EPS beat(4)5.16%
Min EPS beat(4)-1.9%
Max EPS beat(4)15.97%
EPS beat(8)7
Avg EPS beat(8)5.21%
EPS beat(12)11
Avg EPS beat(12)5.87%
EPS beat(16)13
Avg EPS beat(16)5.01%
Revenue beat(2)1
Avg Revenue beat(2)1.25%
Min Revenue beat(2)-3.57%
Max Revenue beat(2)6.06%
Revenue beat(4)2
Avg Revenue beat(4)0.85%
Min Revenue beat(4)-3.57%
Max Revenue beat(4)6.06%
Revenue beat(8)4
Avg Revenue beat(8)0.36%
Revenue beat(12)5
Avg Revenue beat(12)-0.04%
Revenue beat(16)6
Avg Revenue beat(16)-0.04%
PT rev (1m)-1.56%
PT rev (3m)1.96%
EPS NQ rev (1m)5.37%
EPS NQ rev (3m)1.35%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)-0.57%
Revenue NQ rev (1m)-3.44%
Revenue NQ rev (3m)-6.28%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.49 | ||
| Fwd PE | 9.28 | ||
| P/S | 0.85 | ||
| P/FCF | 46.65 | ||
| P/OCF | 10.02 | ||
| P/B | 1.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.42 |
EPS(TTM)1.93
EY8.71%
EPS(NY)2.39
Fwd EY10.78%
FCF(TTM)0.48
FCFY2.14%
OCF(TTM)2.21
OCFY9.98%
SpS25.99
BVpS18.71
TBVpS-4.13
PEG (NY)0.48
PEG (5Y)1.55
Graham Number28.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.08% | ||
| ROE | -0.24% | ||
| ROCE | 3.21% | ||
| ROIC | 2.8% | ||
| ROICexc | 3.16% | ||
| ROICexgc | 9.35% | ||
| OM | 4.79% | ||
| PM (TTM) | N/A | ||
| GM | 30.26% | ||
| FCFM | 1.83% |
ROA(3y)2.35%
ROA(5y)2.9%
ROE(3y)6.54%
ROE(5y)8.23%
ROIC(3y)4.48%
ROIC(5y)4.78%
ROICexc(3y)5.61%
ROICexc(5y)5.73%
ROICexgc(3y)14.25%
ROICexgc(5y)14.22%
ROCE(3y)5.21%
ROCE(5y)5.58%
ROICexgc growth 3Y-15.86%
ROICexgc growth 5Y-2.73%
ROICexc growth 3Y-20.88%
ROICexc growth 5Y-6.13%
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%
F-Score4
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 35.67 | ||
| Debt/EBITDA | 4.05 | ||
| Cap/Depr | 83.74% | ||
| Cap/Sales | 6.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.63% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 0.82 |
F-Score4
WACC7%
ROIC/WACC0.4
Cap/Depr(3y)94.72%
Cap/Depr(5y)101.28%
Cap/Sales(3y)8.08%
Cap/Sales(5y)8.84%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.53%
EPS 3Y-1.51%
EPS 5Y7.41%
EPS Q2Q%6.9%
EPS Next Y23.77%
EPS Next 2Y19.75%
EPS Next 3Y17.21%
EPS Next 5Y15.07%
Revenue 1Y (TTM)13.84%
Revenue growth 3Y6.37%
Revenue growth 5Y4.91%
Sales Q2Q%14.44%
Revenue Next Year18.14%
Revenue Next 2Y11.82%
Revenue Next 3Y9.25%
Revenue Next 5Y8.07%
EBIT growth 1Y-34.08%
EBIT growth 3Y-9.62%
EBIT growth 5Y0.7%
EBIT Next Year113.12%
EBIT Next 3Y37.36%
EBIT Next 5Y19.53%
FCF growth 1Y-68.24%
FCF growth 3Y-24.74%
FCF growth 5YN/A
OCF growth 1Y-32.76%
OCF growth 3Y-14.02%
OCF growth 5Y5.44%
HEWLETT PACKARD ENTERPRISE / HPE FAQ
What is the fundamental rating for HPE stock?
ChartMill assigns a fundamental rating of 4 / 10 to HPE.
What is the valuation status of HEWLETT PACKARD ENTERPRISE (HPE) stock?
ChartMill assigns a valuation rating of 7 / 10 to HEWLETT PACKARD ENTERPRISE (HPE). This can be considered as Undervalued.
What is the profitability of HPE stock?
HEWLETT PACKARD ENTERPRISE (HPE) has a profitability rating of 4 / 10.
How financially healthy is HEWLETT PACKARD ENTERPRISE?
The financial health rating of HEWLETT PACKARD ENTERPRISE (HPE) is 2 / 10.
How sustainable is the dividend of HEWLETT PACKARD ENTERPRISE (HPE) stock?
The dividend rating of HEWLETT PACKARD ENTERPRISE (HPE) is 6 / 10 and the dividend payout ratio is -1349.15%.