HEWLETT PACKARD ENTERPRISE (HPE) Stock Fundamental Analysis
USA - NYSE:HPE - US42824C1099 - Common Stock
24.25 USD
+0.07 (+0.29%)
24.44 USD
+0.19 (+0.78%)
Overall HPE gets a fundamental rating of 4 out of 10. We evaluated HPE against 34 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year HPE was profitable.
In the past year HPE had a positive cash flow from operations.
Of the past 5 years HPE 4 years were profitable.
HPE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HPE has a better Return On Assets (1.47%) than 64.71% of its industry peers.
With a decent Return On Equity value of 4.66%, HPE is doing good in the industry, outperforming 76.47% of the companies in the same industry.
HPE's Return On Invested Capital of 3.50% is fine compared to the rest of the industry. HPE outperforms 64.71% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital 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
HPE has a better Profit Margin (3.43%) than 67.65% of its industry peers.
In the last couple of years the Profit Margin of HPE has grown nicely.
Looking at the Operating Margin, with a value of 6.15%, HPE is in the better half of the industry, outperforming 61.76% of the companies in the same industry.
In the last couple of years the Operating Margin of HPE has remained more or less at the same level.
The Gross Margin of HPE (29.45%) is comparable to the rest of the 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
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
The number of shares outstanding for HPE has been increased compared to 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.
HPE has a Altman-Z score of 0.81. This is in the lower half of the industry: HPE underperforms 61.76% 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 47.06% of its industry peers.
HPE has a Debt/Equity ratio of 0.76. This is a neutral value indicating HPE is somewhat dependend on debt financing.
HPE has a Debt to Equity ratio of 0.76. This is comparable to the rest of the industry: HPE outperforms 44.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 105.12 | ||
| Altman-Z | 0.81 |
ROIC/WACC0.48
WACC7.31%
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.
Looking at the Current ratio, with a value of 0.95, HPE is doing worse than 73.53% of the companies in the same industry.
HPE has a Quick 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.
The Quick ratio of HPE (0.69) is worse than 67.65% 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%.
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 13.97%.
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
HPE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.57% yearly.
Based on estimates for the next years, HPE will show a quite strong growth in Revenue. The Revenue will grow by 9.76% on average per year.
EPS Next Y-3.24%
EPS Next 2Y10.65%
EPS Next 3Y11.05%
EPS Next 5Y10.57%
Revenue Next Year15.43%
Revenue Next 2Y16.63%
Revenue Next 3Y12.15%
Revenue Next 5Y9.76%
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
A Price/Earnings ratio of 12.83 indicates a correct valuation of HPE.
HPE's Price/Earnings ratio is rather cheap when compared to the industry. HPE is cheaper than 94.12% of the companies in the same industry.
HPE is valuated cheaply when we compare the Price/Earnings ratio to 27.00, which is the current average of the S&P500 Index.
HPE is valuated reasonably with a Price/Forward Earnings ratio of 10.00.
Based on the Price/Forward Earnings ratio, HPE is valued cheaper than 88.24% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.87, HPE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.83 | ||
| Fwd PE | 10 |
4.2 Price Multiples
79.41% of the companies in the same industry are more expensive than HPE, based on the Enterprise Value to EBITDA ratio.
HPE's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 142.21 | ||
| EV/EBITDA | 10.88 |
4.3 Compensation for Growth
The decent profitability rating of HPE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.96
EPS Next 2Y10.65%
EPS Next 3Y11.05%
5. Dividend
5.1 Amount
HPE has a Yearly Dividend Yield of 2.24%. 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 1.86. HPE pays more dividend than 91.18% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, HPE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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
67.34% of the earnings are spent on dividend by HPE. 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 2Y10.65%
EPS Next 3Y11.05%
24.25
+0.07 (+0.29%)
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-0.48%
Ins Owners0.36%
Ins Owner Change-7.96%
Market Cap32.00B
Revenue(TTM)33.08B
Net Income(TTM)1.14B
Analysts76
Price Target25.94 (6.97%)
Short Float %3.36%
Short Ratio1.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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)2.19%
PT rev (3m)15.94%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)3.73%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)6.12%
Revenue NQ rev (1m)-0.48%
Revenue NQ rev (3m)7.33%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)3.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.83 | ||
| Fwd PE | 10 | ||
| P/S | 0.97 | ||
| P/FCF | 142.21 | ||
| P/OCF | 12.88 | ||
| P/B | 1.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.88 |
EPS(TTM)1.89
EY7.79%
EPS(NY)2.42
Fwd EY10%
FCF(TTM)0.17
FCFY0.7%
OCF(TTM)1.88
OCFY7.76%
SpS25.07
BVpS18.49
TBVpS-4.55
PEG (NY)N/A
PEG (5Y)5.96
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 | 0.81 |
F-Score4
WACC7.31%
ROIC/WACC0.48
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-3.24%
EPS Next 2Y10.65%
EPS Next 3Y11.05%
EPS Next 5Y10.57%
Revenue 1Y (TTM)13.97%
Revenue growth 3Y2.74%
Revenue growth 5Y0.67%
Sales Q2Q%18.5%
Revenue Next Year15.43%
Revenue Next 2Y16.63%
Revenue Next 3Y12.15%
Revenue Next 5Y9.76%
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 12.83 and the Price/Book (PB) ratio is 1.31.
What is the financial health of HEWLETT PACKARD ENTERPRISE (HPE) stock?
The financial health rating of HEWLETT PACKARD ENTERPRISE (HPE) is 1 / 10.