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. There are concerns on the financial health of HPE while its profitability can be described as average. HPE scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year HPE was profitable.
HPE had a positive operating cash flow in the past year.
Of the past 5 years HPE 4 years were profitable.
Each year in the past 5 years HPE had a positive operating cash flow.
1.2 Ratios
HPE's Return On Assets of -0.08% is fine compared to the rest of the industry. HPE outperforms 65.71% of its industry peers.
The Return On Equity of HPE (-0.24%) is better than 77.14% of its industry peers.
HPE's Return On Invested Capital of 2.80% is fine compared to the rest of the industry. HPE outperforms 65.71% of its industry peers.
HPE had an Average Return On Invested Capital over the past 3 years of 4.48%. This 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's Operating Margin of 4.79% is fine compared to the rest of the industry. HPE outperforms 65.71% of its industry peers.
In the last couple of years the Operating Margin of HPE has declined.
HPE has a Gross Margin (30.26%) which is in line with its industry peers.
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
HPE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
HPE has more shares outstanding than it did 1 year ago.
The number of shares outstanding for HPE has been increased compared to 5 years ago.
Compared to 1 year ago, HPE has a worse debt to assets ratio.
2.2 Solvency
HPE has an Altman-Z score of 0.82. This is a bad value and indicates that HPE is not financially healthy and even 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.
The Debt to FCF ratio of HPE (35.67) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.72 indicates that HPE is somewhat dependend on debt financing.
HPE has a Debt to Equity ratio of 0.72. This is comparable to the rest of the industry: HPE outperforms 51.43% of 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.
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
The earnings per share for HPE have decreased by -2.53% in the last year.
HPE 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, HPE 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
HPE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.81% yearly.
HPE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.54% yearly.
EPS Next Y23.77%
EPS Next 2Y19.75%
EPS Next 3Y17.21%
EPS Next 5Y15.81%
Revenue Next Year18.14%
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
HPE is valuated reasonably with a Price/Earnings ratio of 11.49.
Based on the Price/Earnings ratio, HPE is valued cheaper than 94.29% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.19. HPE is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 9.28 indicates a reasonable valuation of HPE.
85.71% of the companies in the same industry are more expensive than HPE, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of HPE to the average of the S&P500 Index (23.92), we can say HPE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.49 | ||
| Fwd PE | 9.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HPE indicates a rather cheap valuation: HPE is cheaper than 85.71% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HPE is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.65 | ||
| EV/EBITDA | 10.46 |
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
With a Yearly Dividend Yield of 2.59%, 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 0.64. HPE pays more dividend than 91.43% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.92, HPE pays a bit more dividend than the S&P500 average.
| 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 paid a dividend for at least 10 years, which is a reliable track record.
HPE has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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 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 Change-0.08%
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)-0.45%
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 | 10.46 |
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 5Y15.81%
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 5Y7.54%
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%.