HEWLETT PACKARD ENTERPRISE (HPE)

US42824C1099 - Common Stock

17.67  -0.02 (-0.11%)

Premarket: 17.7 +0.03 (+0.17%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to HPE. HPE was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPE has a great profitability rating, there are quite some concerns on its financial health. HPE is cheap, but on the other hand it scores bad on growth. HPE also has an excellent dividend rating.



7

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.
Of the past 5 years HPE 4 years were profitable.
In the past 5 years HPE always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 3.26%, HPE is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
The Return On Equity of HPE (8.92%) is better than 78.13% of its industry peers.
The Return On Invested Capital of HPE (4.99%) is better than 65.63% of its industry peers.
HPE had an Average Return On Invested Capital over the past 3 years of 4.94%. This is significantly below the industry average of 14.44%.
The 3 year average ROIC (4.94%) for HPE is below the current ROIC(4.99%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 3.26%
ROE 8.92%
ROIC 4.99%
ROA(3y)3.67%
ROA(5y)2.49%
ROE(3y)10.36%
ROE(5y)7.04%
ROIC(3y)4.94%
ROIC(5y)4.82%

1.3 Margins

Looking at the Profit Margin, with a value of 6.81%, HPE belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
HPE's Profit Margin has improved in the last couple of years.
HPE's Operating Margin of 8.28% is fine compared to the rest of the industry. HPE outperforms 78.13% of its industry peers.
In the last couple of years the Operating Margin of HPE has grown nicely.
HPE has a Gross Margin of 35.75%. This is in the better half of the industry: HPE outperforms 62.50% of its industry peers.
HPE's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 8.28%
PM (TTM) 6.81%
GM 35.75%
OM growth 3Y12.51%
OM growth 5Y1.94%
PM growth 3YN/A
PM growth 5Y2.36%
GM growth 3Y3.84%
GM growth 5Y3.27%

3

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 remains at a similar level compared to 1 year ago.
HPE has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HPE has an improved debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 0.84, we must say that HPE is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.84, HPE is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
The Debt to FCF ratio of HPE is 4.86, which is a neutral value as it means it would take HPE, 4.86 years of fcf income to pay off all of its debts.
HPE has a Debt to FCF ratio of 4.86. This is comparable to the rest of the industry: HPE outperforms 59.38% of its industry peers.
HPE has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
HPE has a Debt to Equity ratio (0.40) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.4
Debt/FCF 4.86
Altman-Z 0.84
ROIC/WACC0.53
WACC9.35%

2.3 Liquidity

HPE has a Current Ratio of 0.89. 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 Current ratio of 0.89. This is amonst the worse of the industry: HPE underperforms 90.63% of its industry peers.
HPE has a Quick Ratio of 0.89. This is a bad value and indicates that HPE is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.63, HPE is doing worse than 90.63% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.89
Quick Ratio 0.63

3

3. Growth

3.1 Past

HPE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.19%.
The Earnings Per Share has been growing slightly by 6.59% on average over the past years.
The Revenue has decreased by -4.30% in the past year.
Measured over the past years, HPE shows a decrease in Revenue. The Revenue has been decreasing by -1.14% on average per year.
EPS 1Y (TTM)-5.19%
EPS 3Y16.96%
EPS 5Y6.59%
EPS growth Q2Q-23.81%
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y2.59%
Revenue growth 5Y-1.14%
Revenue growth Q2Q-13.5%

3.2 Future

Based on estimates for the next years, HPE will show a small growth in Earnings Per Share. The EPS will grow by 7.15% on average per year.
HPE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.60% yearly.
EPS Next Y-11.68%
EPS Next 2Y-1.73%
EPS Next 3Y-0.76%
EPS Next 5Y7.15%
Revenue Next Year0.16%
Revenue Next 2Y2.18%
Revenue Next 3Y2.12%
Revenue Next 5Y2.6%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same 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.

7

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 8.79, the valuation of HPE can be described as 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 26.42, HPE is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.47, the valuation of HPE can be described as very reasonable.
HPE's Price/Forward Earnings ratio is rather cheap when compared to the industry. HPE is cheaper than 87.50% of the companies 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 22.74.
Industry RankSector Rank
PE 8.79
Fwd PE 8.47

4.2 Price Multiples

HPE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HPE is cheaper than 84.38% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HPE is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 8.73
EV/EBITDA 6.31

4.3 Compensation for Growth

The decent profitability rating of HPE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.33
EPS Next 2Y-1.73%
EPS Next 3Y-0.76%

7

5. Dividend

5.1 Amount

HPE has a Yearly Dividend Yield of 3.02%.
HPE's Dividend Yield is rather good when compared to the industry average which is at 2.55. HPE pays more dividend than 90.63% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, HPE pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.02%

5.2 History

The dividend of HPE has a limited annual growth rate of 5.03%.
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)5.03%
Div Incr Years1
Div Non Decr Years8

5.3 Sustainability

HPE pays out 33.07% of its income as dividend. This is a sustainable payout ratio.
The dividend of HPE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP33.07%
EPS Next 2Y-1.73%
EPS Next 3Y-0.76%

HEWLETT PACKARD ENTERPRISE

NYSE:HPE (3/27/2024, 8:19:16 PM)

Premarket: 17.7 +0.03 (+0.17%)

17.67

-0.02 (-0.11%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap22.97B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 3.02%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 8.79
Fwd PE 8.47
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.33
Profitability
Industry RankSector Rank
ROA 3.26%
ROE 8.92%
ROCE
ROIC
ROICexc
ROICexgc
OM 8.28%
PM (TTM) 6.81%
GM 35.75%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.48
Health
Industry RankSector Rank
Debt/Equity 0.4
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.89
Quick Ratio 0.63
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-5.19%
EPS 3Y16.96%
EPS 5Y
EPS growth Q2Q
EPS Next Y-11.68%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y2.59%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y