HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
USA - NYSE:HPE - US42824C1099 - Common Stock
24.43 USD
-0.05 (-0.2%)
24.4 USD
-0.03 (-0.12%)
We assign a fundamental rating of 4 out of 10 to HPE. HPE was compared to 33 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 is not valued too expensively and it also shows a decent growth rate. HPE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HPE had positive earnings in the past year.
In the past year HPE had a positive cash flow from operations.
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's Return On Assets of 1.47% is fine compared to the rest of the industry. HPE outperforms 63.64% of its industry peers.
HPE has a Return On Equity of 4.66%. This is in the better half of the industry: HPE outperforms 75.76% 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 63.64% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HPE is significantly below the industry average of 14.92%.
| 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
With a decent Profit Margin value of 3.43%, HPE is doing good in the industry, outperforming 66.67% of the companies in the same industry.
HPE's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 6.15%, HPE is doing good in the industry, outperforming 60.61% of the companies in the same industry.
HPE's Operating Margin has been stable in the last couple of years.
HPE's Gross Margin of 29.45% is in line compared to the rest of the industry. HPE outperforms 45.45% of its industry peers.
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
HPE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for HPE has been increased compared to 1 year ago.
HPE has more shares outstanding than it did 5 years ago.
HPE has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.81, we must say that HPE is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of HPE (0.81) is worse than 63.64% of its industry peers.
HPE has a debt to FCF ratio of 105.12. This is a negative value and a sign of low solvency as HPE would need 105.12 years to pay back of 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 45.45% of its industry peers.
A Debt/Equity ratio of 0.76 indicates that HPE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.76, HPE is in line with its industry, outperforming 42.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 105.12 | ||
| Altman-Z | 0.81 |
ROIC/WACC0.47
WACC7.39%
2.3 Liquidity
A Current Ratio of 0.95 indicates that HPE may have some problems paying its short term obligations.
HPE has a worse Current ratio (0.95) than 72.73% of its industry peers.
A Quick Ratio of 0.69 indicates that HPE may have some problems paying its short term obligations.
With a Quick ratio value of 0.69, HPE is not doing good in the industry: 69.70% of the companies in the same industry are doing better.
| 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.
HPE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.67% yearly.
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
The Earnings Per Share is expected to grow by 5.81% on average over the next years.
HPE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.77% yearly.
EPS Next Y-3.14%
EPS Next 2Y10.15%
EPS Next 3Y10.54%
EPS Next 5Y5.81%
Revenue Next Year15.29%
Revenue Next 2Y16.12%
Revenue Next 3Y11.6%
Revenue Next 5Y6.77%
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 correctly with a Price/Earnings ratio of 12.93.
Compared to the rest of the industry, the Price/Earnings ratio of HPE indicates a rather cheap valuation: HPE is cheaper than 93.94% of the companies listed in the same industry.
HPE is valuated cheaply when we compare the Price/Earnings ratio to 27.86, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.17 indicates a reasonable valuation of HPE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HPE indicates a rather cheap valuation: HPE is cheaper than 81.82% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.32. HPE is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.93 | ||
| Fwd PE | 10.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPE is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
HPE's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 143.26 | ||
| EV/EBITDA | 10.94 |
4.3 Compensation for Growth
The decent profitability rating of HPE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)6.01
EPS Next 2Y10.15%
EPS Next 3Y10.54%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 5.61%, which is a nice return.
HPE's Dividend Yield is rather good when compared to the industry average which is at 2.17. HPE pays more dividend than 100.00% of the companies in the same industry.
HPE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.61% |
5.2 History
The dividend of HPE has a limited annual growth rate of 3.20%.
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)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.
HPE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP67.34%
EPS Next 2Y10.15%
EPS Next 3Y10.54%
24.43
-0.05 (-0.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners88.19%
Inst Owner Change-1.34%
Ins Owners0.36%
Ins Owner Change-5.95%
Market Cap32.23B
Analysts76
Price Target25.94 (6.18%)
Short Float %3.55%
Short Ratio2.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.61% |
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)6.87%
PT rev (3m)22.69%
EPS NQ rev (1m)3.54%
EPS NQ rev (3m)6.65%
EPS NY rev (1m)2.47%
EPS NY rev (3m)6.67%
Revenue NQ rev (1m)5.71%
Revenue NQ rev (3m)15.41%
Revenue NY rev (1m)2.55%
Revenue NY rev (3m)5.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.93 | ||
| Fwd PE | 10.17 | ||
| P/S | 0.97 | ||
| P/FCF | 143.26 | ||
| P/OCF | 12.98 | ||
| P/B | 1.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.94 |
EPS(TTM)1.89
EY7.74%
EPS(NY)2.4
Fwd EY9.83%
FCF(TTM)0.17
FCFY0.7%
OCF(TTM)1.88
OCFY7.71%
SpS25.07
BVpS18.49
TBVpS-4.55
PEG (NY)N/A
PEG (5Y)6.01
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%
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 Turnover0.43
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 | 0.81 |
F-Score4
WACC7.39%
ROIC/WACC0.47
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-3.14%
EPS Next 2Y10.15%
EPS Next 3Y10.54%
EPS Next 5Y5.81%
Revenue 1Y (TTM)13.97%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%18.5%
Revenue Next Year15.29%
Revenue Next 2Y16.12%
Revenue Next 3Y11.6%
Revenue Next 5Y6.77%
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%