HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
NYSE:HPE - New York Stock Exchange, Inc. - US42824C1099 - Common Stock - Currency: USD
Overall HPE gets a fundamental rating of 4 out of 10. We evaluated HPE against 32 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 correct valuation and a medium growth rate.
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 Return On Assets (2.02%) which is in line with its industry peers.
The Return On Equity of HPE (5.75%) is better than 75.00% of its industry peers.
HPE's Return On Invested Capital of 4.54% is in line compared to the rest of the industry. HPE outperforms 59.38% of its industry peers.
HPE had an Average Return On Invested Capital over the past 3 years of 5.52%. This is significantly below the industry average of 16.14%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.02% | ||
| ROE | 5.75% | ||
| ROIC | 4.54% |
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 (4.34%) than 71.88% of its industry peers.
HPE's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 6.98%, HPE is in line with its industry, outperforming 59.38% of the companies in the same industry.
HPE's Operating Margin has been stable in the last couple of years.
HPE has a Gross Margin (30.05%) which 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 | 6.98% | ||
| PM (TTM) | 4.34% | ||
| GM | 30.05% |
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
Compared to 5 years ago, HPE has more shares outstanding
The debt/assets ratio for HPE is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.01, we must say that HPE is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of HPE (1.01) is worse than 62.50% of its industry peers.
HPE has a debt to FCF ratio of 163.83. This is a negative value and a sign of low solvency as HPE would need 163.83 years to pay back of all of its debts.
HPE has a Debt to FCF ratio (163.83) which is in line with its industry peers.
HPE has a Debt/Equity ratio of 0.52. This is a neutral value indicating HPE is somewhat dependend on debt financing.
HPE has a Debt to Equity ratio (0.52) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 163.83 | ||
| Altman-Z | 1.01 |
ROIC/WACC0.61
WACC7.42%
2.3 Liquidity
A Current Ratio of 1.29 indicates that HPE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.29, HPE is not doing good in the industry: 62.50% 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.
HPE has a Quick ratio (0.96) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.09% over the past year.
HPE shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.15% yearly.
HPE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.79%.
The Revenue has been growing slightly by 0.67% on average over the past years.
EPS 1Y (TTM)2.09%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%-9.52%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%5.87%
3.2 Future
The Earnings Per Share is expected to grow by 5.81% on average over the next years.
Based on estimates for the next years, HPE will show a small growth in Revenue. The Revenue will grow by 5.70% on average per year.
EPS Next Y-8.82%
EPS Next 2Y4.87%
EPS Next 3Y7.75%
EPS Next 5Y5.81%
Revenue Next Year11.18%
Revenue Next 2Y9.54%
Revenue Next 3Y7.77%
Revenue Next 5Y5.7%
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
With a Price/Earnings ratio of 10.56, the valuation of HPE can be described as very reasonable.
87.50% of the companies in the same industry are more expensive than HPE, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.41, HPE is valued rather cheaply.
A Price/Forward Earnings ratio of 9.46 indicates a reasonable valuation of HPE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HPE indicates a somewhat cheap valuation: HPE is cheaper than 78.13% of the companies listed 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 35.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.56 | ||
| Fwd PE | 9.46 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPE is valued cheaply inside the industry as 90.63% 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 | 252.63 | ||
| EV/EBITDA | 7.11 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)4.91
EPS Next 2Y4.87%
EPS Next 3Y7.75%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 2.44%.
HPE's Dividend Yield is rather good when compared to the industry average which is at 1.95. HPE pays more dividend than 96.88% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, HPE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
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.
HPE has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)3.2%
Div Incr Years2
Div Non Decr Years9
5.3 Sustainability
HPE pays out 53.50% of its income as dividend. This is a bit on the high side, but may be sustainable.
HPE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP53.5%
EPS Next 2Y4.87%
EPS Next 3Y7.75%
NYSE:HPE (7/14/2025, 10:30:08 AM)
20.6
-0.12 (-0.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners91.27%
Inst Owner Change-0.03%
Ins Owners0.41%
Ins Owner Change4.89%
Market Cap27.03B
Analysts77
Price Target20.69 (0.44%)
Short Float %2.94%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
Yearly Dividend0.52
Dividend Growth(5Y)3.2%
DP53.5%
Div Incr Years2
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.04%
Min EPS beat(2)-1.9%
Max EPS beat(2)15.97%
EPS beat(4)3
Avg EPS beat(4)5.7%
Min EPS beat(4)-1.9%
Max EPS beat(4)15.97%
EPS beat(8)7
Avg EPS beat(8)5.15%
EPS beat(12)10
Avg EPS beat(12)5.28%
EPS beat(16)13
Avg EPS beat(16)5.62%
Revenue beat(2)1
Avg Revenue beat(2)0.46%
Min Revenue beat(2)-0.51%
Max Revenue beat(2)1.42%
Revenue beat(4)2
Avg Revenue beat(4)0.46%
Min Revenue beat(4)-0.52%
Max Revenue beat(4)1.45%
Revenue beat(8)3
Avg Revenue beat(8)-0.18%
Revenue beat(12)5
Avg Revenue beat(12)0.07%
Revenue beat(16)5
Avg Revenue beat(16)-0.37%
PT rev (1m)6.49%
PT rev (3m)2.55%
EPS NQ rev (1m)1%
EPS NQ rev (3m)2.22%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-0.72%
Revenue NQ rev (1m)1.96%
Revenue NQ rev (3m)4.54%
Revenue NY rev (1m)2.54%
Revenue NY rev (3m)2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.56 | ||
| Fwd PE | 9.46 | ||
| P/S | 0.85 | ||
| P/FCF | 252.63 | ||
| P/OCF | 11.59 | ||
| P/B | 1.13 | ||
| P/tB | 4.08 | ||
| EV/EBITDA | 7.11 |
EPS(TTM)1.95
EY9.47%
EPS(NY)2.18
Fwd EY10.57%
FCF(TTM)0.08
FCFY0.4%
OCF(TTM)1.78
OCFY8.63%
SpS24.12
BVpS18.19
TBVpS5.05
PEG (NY)N/A
PEG (5Y)4.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.02% | ||
| ROE | 5.75% | ||
| ROCE | 5.1% | ||
| ROIC | 4.54% | ||
| ROICexc | 6.22% | ||
| ROICexgc | 13.66% | ||
| OM | 6.98% | ||
| PM (TTM) | 4.34% | ||
| GM | 30.05% | ||
| FCFM | 0.34% |
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-Score4
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 163.83 | ||
| Debt/EBITDA | 2.66 | ||
| Cap/Depr | 91.3% | ||
| Cap/Sales | 7.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 50.19% | ||
| Profit Quality | 7.8% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 1.01 |
F-Score4
WACC7.42%
ROIC/WACC0.61
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)2.09%
EPS 3Y0.17%
EPS 5Y2.15%
EPS Q2Q%-9.52%
EPS Next Y-8.82%
EPS Next 2Y4.87%
EPS Next 3Y7.75%
EPS Next 5Y5.81%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%5.87%
Revenue Next Year11.18%
Revenue Next 2Y9.54%
Revenue Next 3Y7.77%
Revenue Next 5Y5.7%
EBIT growth 1Y-0.76%
EBIT growth 3Y5.66%
EBIT growth 5Y0.14%
EBIT Next Year67.25%
EBIT Next 3Y27.85%
EBIT Next 5Y23.39%
FCF growth 1Y-90.23%
FCF growth 3Y-16.32%
FCF growth 5Y11.59%
OCF growth 1Y-46.37%
OCF growth 3Y-9.57%
OCF growth 5Y1.66%