HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HPE - US42824C1099 - Common Stock
23.87 USD
-0.67 (-2.73%)
23.87 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to HPE. HPE was compared to 35 industry peers in the Technology Hardware, Storage & Peripherals industry. There are concerns on the financial health of HPE while its profitability can be described as average. HPE has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years HPE had a positive operating cash flow.
1.2 Ratios
HPE has a Return On Assets (-0.08%) which is comparable to the rest of the industry.
With a decent Return On Equity value of -0.24%, HPE is doing good in the industry, outperforming 71.43% of the companies in the same industry.
With a decent Return On Invested Capital value of 2.80%, HPE is doing good in the industry, outperforming 65.71% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HPE is significantly below the industry average of 15.26%.
| 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 Operating Margin of 4.79%. This is in the better half of the industry: HPE outperforms 62.86% of its industry peers.
In the last couple of years the Operating Margin of HPE has declined.
With a Gross Margin value of 30.26%, HPE perfoms like the industry average, outperforming 54.29% of the companies in the same industry.
HPE'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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HPE is destroying value.
The number of shares outstanding for HPE has been increased compared to 1 year ago.
The number of shares outstanding for HPE has been increased compared to 5 years ago.
HPE has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.86, we must say that HPE is in the distress zone and has some risk of bankruptcy.
HPE has a worse Altman-Z score (0.86) than 60.00% of its industry peers.
HPE has a debt to FCF ratio of 35.67. This is a negative value and a sign of low solvency as HPE would need 35.67 years to pay back of all of its debts.
The Debt to FCF ratio of HPE (35.67) is comparable to the rest of the industry.
HPE has a Debt/Equity ratio of 0.72. This is a neutral value indicating HPE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.72, HPE perfoms like the industry average, outperforming 48.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 35.67 | ||
| Altman-Z | 0.86 |
ROIC/WACC0.4
WACC7.08%
2.3 Liquidity
A Current Ratio of 1.01 indicates that HPE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.01, HPE is not doing good in the industry: 65.71% of the companies in the same industry are doing better.
A Quick Ratio of 0.76 indicates that HPE may have some problems paying its short term obligations.
The Quick ratio of HPE (0.76) 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.
HPE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.07% yearly.
EPS Next Y24.04%
EPS Next 2Y20.03%
EPS Next 3Y16.44%
EPS Next 5Y15.07%
Revenue Next Year17.95%
Revenue Next 2Y11.47%
Revenue Next 3Y9.35%
Revenue Next 5Y8.07%
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 accelerating.
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 correctly with a Price/Earnings ratio of 12.37.
Based on the Price/Earnings ratio, HPE is valued cheaply inside the industry as 91.43% of the companies are valued more expensively.
HPE's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.54.
With a Price/Forward Earnings ratio of 9.97, the valuation of HPE can be described as very reasonable.
Based on the Price/Forward Earnings ratio, HPE is valued a bit cheaper than the industry average as 80.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.78, HPE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.37 | ||
| Fwd PE | 9.97 |
4.2 Price Multiples
HPE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HPE is cheaper than 82.86% of the companies in the same industry.
HPE's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 50.23 | ||
| EV/EBITDA | 11.18 |
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 16.44% in the coming years.
PEG (NY)0.51
PEG (5Y)1.67
EPS Next 2Y20.03%
EPS Next 3Y16.44%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 2.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.72, HPE pays a better dividend. On top of this HPE pays more dividend than 91.43% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, HPE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
5.2 History
The dividend of HPE has a limited annual growth rate of 4.91%.
HPE has paid a dividend for at least 10 years, which is 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
HPE has negative earnings and hence a negative payout ratio. The dividend may be in danger.
HPE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-1349.15%
EPS Next 2Y20.03%
EPS Next 3Y16.44%
23.87
-0.67 (-2.73%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners90.91%
Inst Owner Change0.54%
Ins Owners0.33%
Ins Owner Change-7.39%
Market Cap31.50B
Revenue(TTM)34.30B
Net Income(TTM)-59.00M
Analysts74.62
Price Target26.57 (11.31%)
Short Float %3.71%
Short Ratio1.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
Yearly Dividend0.61
Dividend Growth(5Y)4.91%
DP-1349.15%
Div Incr Years2
Div Non Decr Years9
Ex-Date
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)-1.12%
PT rev (3m)11.85%
EPS NQ rev (1m)-0.25%
EPS NQ rev (3m)3.35%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)2.3%
Revenue NQ rev (1m)0.2%
Revenue NQ rev (3m)5.49%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.37 | ||
| Fwd PE | 9.97 | ||
| P/S | 0.92 | ||
| P/FCF | 50.23 | ||
| P/OCF | 10.79 | ||
| P/B | 1.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.18 |
EPS(TTM)1.93
EY8.09%
EPS(NY)2.39
Fwd EY10.03%
FCF(TTM)0.48
FCFY1.99%
OCF(TTM)2.21
OCFY9.27%
SpS25.99
BVpS18.71
TBVpS-4.13
PEG (NY)0.51
PEG (5Y)1.67
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 | 0.86 |
F-Score4
WACC7.08%
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 Y24.04%
EPS Next 2Y20.03%
EPS Next 3Y16.44%
EPS Next 5Y15.07%
Revenue 1Y (TTM)13.84%
Revenue growth 3Y6.37%
Revenue growth 5Y4.91%
Sales Q2Q%14.44%
Revenue Next Year17.95%
Revenue Next 2Y11.47%
Revenue Next 3Y9.35%
Revenue Next 5Y8.07%
EBIT growth 1Y-34.08%
EBIT growth 3Y-9.62%
EBIT growth 5Y0.7%
EBIT Next Year108.98%
EBIT Next 3Y38.25%
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 for HPE stock?
ChartMill assigns a valuation rating of 6 / 10 to HEWLETT PACKARD ENTERPRISE (HPE). This can be considered as Fairly Valued.
What is the profitability of HPE stock?
HEWLETT PACKARD ENTERPRISE (HPE) has a profitability rating of 4 / 10.
What are the PE and PB ratios of HEWLETT PACKARD ENTERPRISE (HPE) stock?
The Price/Earnings (PE) ratio for HEWLETT PACKARD ENTERPRISE (HPE) is 12.37 and the Price/Book (PB) ratio is 1.28.
What is the financial health of HEWLETT PACKARD ENTERPRISE (HPE) stock?
The financial health rating of HEWLETT PACKARD ENTERPRISE (HPE) is 2 / 10.