HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HPE - US42824C1099 - Common Stock
21.87 USD
+0.34 (+1.58%)
21.85 USD
-0.02 (-0.09%)
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. HPE has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
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
The Return On Assets of HPE (1.47%) is better than 62.86% of its industry peers.
The Return On Equity of HPE (4.66%) is better than 74.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.50%, HPE is in the better half of the industry, outperforming 65.71% of the companies in the same industry.
HPE had an Average Return On Invested Capital over the past 3 years of 5.52%. This is significantly below the industry average of 15.32%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.47% | ||
| ROE | 4.66% | ||
| ROIC | 3.5% |
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
HPE has a better Profit Margin (3.43%) than 65.71% of its industry peers.
HPE's Profit Margin has improved in the last couple of years.
HPE has a better Operating Margin (6.15%) than 65.71% of its industry peers.
HPE's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 29.45%, 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 | 6.15% | ||
| PM (TTM) | 3.43% | ||
| GM | 29.45% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HPE is destroying value.
HPE has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, HPE has more shares outstanding
Compared to 1 year ago, HPE has a worse debt to assets ratio.
2.2 Solvency
HPE has an Altman-Z score of 0.77. This is a bad value and indicates that HPE is not financially healthy and even has some risk of bankruptcy.
HPE's Altman-Z score of 0.77 is on the low side compared to the rest of the industry. HPE is outperformed by 60.00% of its industry peers.
The Debt to FCF ratio of HPE is 105.12, which is on the high side as it means it would take HPE, 105.12 years of fcf income to pay off all of its debts.
HPE's Debt to FCF ratio of 105.12 is in line compared to the rest of the industry. HPE outperforms 45.71% of its industry peers.
A Debt/Equity ratio of 0.76 indicates that HPE is somewhat dependend on debt financing.
HPE's Debt to Equity ratio of 0.76 is in line compared to the rest of the industry. HPE outperforms 42.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 105.12 | ||
| Altman-Z | 0.77 |
ROIC/WACC0.49
WACC7.22%
2.3 Liquidity
HPE has a Current Ratio of 0.95. 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 worse Current ratio (0.95) than 74.29% of its industry peers.
A Quick Ratio of 0.69 indicates that HPE may have some problems paying its short term obligations.
The Quick ratio of HPE (0.69) is worse than 65.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
HPE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.56%.
Measured over the past 5 years, HPE shows a small growth in Earnings Per Share. The EPS has been growing by 2.15% on average per year.
Looking at the last year, HPE shows a quite strong growth in Revenue. The Revenue has grown by 13.97% in the last 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)-1.56%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%-12%
Revenue 1Y (TTM)13.97%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%18.5%
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 11.31% on average per year.
The Revenue is expected to grow by 9.51% on average over the next years. This is quite good.
EPS Next Y-3.18%
EPS Next 2Y10.41%
EPS Next 3Y11.54%
EPS Next 5Y11.31%
Revenue Next Year15.45%
Revenue Next 2Y16.61%
Revenue Next 3Y12.71%
Revenue Next 5Y9.51%
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.
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
Based on the Price/Earnings ratio of 11.57, the valuation of HPE can be described as reasonable.
Based on the Price/Earnings ratio, HPE is valued cheaper than 91.43% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.31. HPE is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.06, the valuation of HPE can be described as very reasonable.
Based on the Price/Forward Earnings ratio, HPE is valued a bit cheaper than 80.00% of the companies in the same industry.
HPE is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.57 | ||
| Fwd PE | 9.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPE is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as HPE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 128.25 | ||
| EV/EBITDA | 10.09 |
4.3 Compensation for Growth
The decent profitability rating of HPE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.38
EPS Next 2Y10.41%
EPS Next 3Y11.54%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 2.60%. 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 2.08. HPE pays more dividend than 91.43% of the companies in the same industry.
HPE's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
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 Years2
Div Non Decr Years9
5.3 Sustainability
HPE pays out 67.34% of its income as dividend. This is not a sustainable payout ratio.
The dividend of HPE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP67.34%
EPS Next 2Y10.41%
EPS Next 3Y11.54%
21.87
+0.34 (+1.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners88.19%
Inst Owner Change0.51%
Ins Owners0.36%
Ins Owner Change-7.39%
Market Cap28.86B
Revenue(TTM)33.08B
Net Income(TTM)1.14B
Analysts75.38
Price Target26.87 (22.86%)
Short Float %3.55%
Short Ratio1.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
Yearly Dividend0.52
Dividend Growth(5Y)3.2%
DP67.34%
Div Incr Years2
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.57%
Min EPS beat(2)1.17%
Max EPS beat(2)15.97%
EPS beat(4)3
Avg EPS beat(4)4.54%
Min EPS beat(4)-1.9%
Max EPS beat(4)15.97%
EPS beat(8)7
Avg EPS beat(8)4.78%
EPS beat(12)11
Avg EPS beat(12)5.45%
EPS beat(16)13
Avg EPS beat(16)5.08%
Revenue beat(2)2
Avg Revenue beat(2)3.74%
Min Revenue beat(2)1.42%
Max Revenue beat(2)6.06%
Revenue beat(4)3
Avg Revenue beat(4)2.11%
Min Revenue beat(4)-0.51%
Max Revenue beat(4)6.06%
Revenue beat(8)4
Avg Revenue beat(8)0.67%
Revenue beat(12)6
Avg Revenue beat(12)0.67%
Revenue beat(16)6
Avg Revenue beat(16)0.1%
PT rev (1m)3.58%
PT rev (3m)13.12%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)4.01%
EPS NY rev (1m)0.07%
EPS NY rev (3m)2.42%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)6.18%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)2.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.57 | ||
| Fwd PE | 9.06 | ||
| P/S | 0.87 | ||
| P/FCF | 128.25 | ||
| P/OCF | 11.62 | ||
| P/B | 1.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.09 |
EPS(TTM)1.89
EY8.64%
EPS(NY)2.41
Fwd EY11.04%
FCF(TTM)0.17
FCFY0.78%
OCF(TTM)1.88
OCFY8.61%
SpS25.07
BVpS18.49
TBVpS-4.55
PEG (NY)N/A
PEG (5Y)5.38
Graham Number28.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.47% | ||
| ROE | 4.66% | ||
| ROCE | 4.07% | ||
| ROIC | 3.5% | ||
| ROICexc | 3.84% | ||
| ROICexgc | 10.81% | ||
| OM | 6.15% | ||
| PM (TTM) | 3.43% | ||
| GM | 29.45% | ||
| FCFM | 0.68% |
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%
ROICexgc growth 3Y10.99%
ROICexgc 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-Score4
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 105.12 | ||
| Debt/EBITDA | 4.1 | ||
| Cap/Depr | 90.36% | ||
| Cap/Sales | 6.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 54.77% | ||
| Profit Quality | 19.81% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | 0.77 |
F-Score4
WACC7.22%
ROIC/WACC0.49
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)-1.56%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%-12%
EPS Next Y-3.18%
EPS Next 2Y10.41%
EPS Next 3Y11.54%
EPS Next 5Y11.31%
Revenue 1Y (TTM)13.97%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%18.5%
Revenue Next Year15.45%
Revenue Next 2Y16.61%
Revenue Next 3Y12.71%
Revenue Next 5Y9.51%
EBIT growth 1Y-10.43%
EBIT growth 3Y5.66%
EBIT growth 5Y0.14%
EBIT Next Year79.02%
EBIT Next 3Y33.97%
EBIT Next 5Y17.11%
FCF growth 1Y-84.67%
FCF growth 3Y-16.32%
FCF growth 5Y11.59%
OCF growth 1Y-46.25%
OCF growth 3Y-9.57%
OCF growth 5Y1.66%
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 6 / 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 11.57 and the Price/Book (PB) ratio is 1.18.
What is the financial health of HEWLETT PACKARD ENTERPRISE (HPE) stock?
The financial health rating of HEWLETT PACKARD ENTERPRISE (HPE) is 1 / 10.