Shares of Hewlett Packard Enterprise (HPE) fell in after-hours trading after the tech company reported earnings for its fourth quarter of Fiscal Year 2025. Earnings per share came in at $0.62, which beat analysts’ consensus estimate of $0.58 per share. At the same time, sales increased by 14% year-over-year, with revenue hitting $9.7 billion. However, this missed analysts’ expectations of $9.9 billion.
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These results were driven by a 150% surge in Networking segment revenue to $2.8 billion. Interestingly, this segment was previously known as the Intelligent Edge segment and was renamed this quarter. Nevertheless, its Server and Hybrid Cloud segments saw revenues decline by 5% and 12%, respectively, while the Server segment also saw margins fall. This is especially important because servers make up the largest portion of the firm’s revenue, as indicated by the image below.
Outlook for 2026
Looking forward, management now expects revenue growth and adjusted earnings per share for FY 2026 to be in the ranges of 17% to 22% and $2.25 to $2.45, respectively. For reference, analysts were expecting 18% in revenue growth along with an adjusted EPS of $2.38.
Is HPE Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HPE stock based on six Buys, nine Holds, and zero Sells assigned in the past three months. Furthermore, the average HPE price target of $26.54 per share implies 15.6% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
