Hewlett Packard Enterprise (HPE) AI Stock Analysis

• Market Cap: $31.03B
• Dividend Yield: 2.21%
• Average Volume (3M): 18.96M
• Price to Earnings (P/E): 29.7
• Beta (1Y): 1.62
• Revenue Growth: 14.39%
• EPS Growth: -38.96%
• Country: US
• Employees: 61,000
• Sector: Technology
• Sector Strength: 84
• Industry: Communication Equipment
• EPS (TTM): 0.44
• Shares Outstanding: 1,319,450,100
• 10 Day Avg. Volume: 26,959,214
• 30 Day Avg. Volume: 18,959,955
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.50
• Enterprise Value/Revenue: 1.41
• Enterprise Value/Gross Profit: 5.03
• Enterprise Value/Ebitda: 12.05
• 1Y Price Target: $25.71
• Price Target Upside: 9.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 77 Outperform
• Price Target: $26.00 ▲(10.64% Upside)

Hewlett Packard Enterprise's overall stock score reflects strong financial performance driven by revenue growth and cash flow generation, supported by positive technical indicators. The high P/E ratio suggests potential overvaluation, but strategic initiatives and successful acquisitions provide a positive outlook. Challenges in profit margins and leverage need addressing to ensure sustained growth.

Positive Factors

Growth Potential

The upcoming Analyst Day is expected to be a significant event, providing more details on long-term growth targets and financial strategies, which could positively influence the stock sentiment.

Networking Segment Performance

The new Networking segment represented almost 50% of total operating profit, highlighting the accretive margin profile of the combined company.

Revenue Growth

Hewlett Packard Enterprise showed stronger-than-expected performance in Servers and Networking, which contributed to revenue exceeding expectations by 4%.

Negative Factors

AI Server Margins

AI server margins were a concern, driven by one large deal in the quarter, indicating potential challenges in this area.

Cost Impacts

Free cash flow guidance was reduced to $700 million due to impacts from the Juniper acquisition.

Free Cash Flow Guidance

Management guided F25E free cash flow to $700 million, down from a prior estimate of $1 billion, due to impacts from the Juniper acquisition.

Hewlett Packard Enterprise Business Overview & Revenue Model

Company Description

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data seamlessly in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE BladeSystem and HPE Synergy; and solutions for secondary workloads and traditional tape, storage networking, and disk products, such as HPE Modular Storage Arrays and HPE XP. It also offers HPE Apollo and Cray products; and HPE Superdome Flex, HPE Nonstop, HPE Integrity, and HPE Edgeline products. In addition, the company provides HPE Aruba product portfolio that includes wired and wireless local area network hardware products, such as Wi-Fi access points, switches, routers, and sensors; HPE Aruba software and services comprising cloud-based management, network management, network access control, analytics and assurance, and location; and professional and support services, as well as as-a-service and consumption models for the intelligent edge portfolio of products. Further, it offers various leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. Additionally, the company invests in communications and media solutions. It has a partnership with Striim, Inc. to offer high performance and mission-critical solutions with real-time analytics. It serves commercial and large enterprise groups, such as business and public sector enterprises; and through various partners comprising resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. Hewlett Packard Enterprise Company was founded in 1939 and is headquartered in Houston, Texas.

How the Company Makes Money

Hewlett Packard Enterprise generates revenue through several key streams: hardware sales, which include servers, storage devices, and networking equipment; software sales, particularly for its management and security solutions; and services, encompassing consulting, support, and managed services. The company also earns revenue from its hybrid cloud solutions, which enable businesses to integrate on-premises and cloud environments. Significant partnerships with major cloud providers and technology firms enhance HPE's offerings and expand its market reach. Additionally, subscription and consumption-based models for certain services provide recurring revenue, contributing to the company's overall financial performance.

Hewlett Packard Enterprise Financial Statement Overview

Summary

Hewlett Packard Enterprise demonstrates a positive revenue growth trend and strong cash flow generation, which are key strengths. However, declining profit margins and increased leverage present challenges that need to be addressed to ensure long-term financial stability. The company should focus on improving operational efficiency and managing debt levels to enhance profitability and shareholder value.

Income Statement

Hewlett Packard Enterprise shows a solid revenue growth rate of 4.64% in the TTM, indicating a positive trajectory. However, the gross profit margin has decreased from previous years, reflecting potential cost pressures. The net profit margin has also declined to 3.78% in the TTM, which is below the industry average, suggesting challenges in maintaining profitability. The EBIT and EBITDA margins have decreased, indicating potential operational inefficiencies.

Balance Sheet

The debt-to-equity ratio has increased to 0.97 in the TTM, indicating higher leverage, which could pose a risk if not managed properly. Return on equity has decreased to 5.08%, reflecting reduced profitability for shareholders. The equity ratio remains stable, suggesting a balanced asset structure, but the rising debt levels warrant caution.

Cash Flow

The company exhibits a remarkable free cash flow growth rate of 1653.27% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is relatively low at 0.09, suggesting that cash flows are not fully aligned with reported earnings. However, the free cash flow to net income ratio of 0.76 indicates efficient cash conversion from earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	33.02B	30.13B	29.11B	28.11B	27.86B	26.94B
Gross Profit	9.23B	9.88B	9.92B	8.82B	9.10B	8.05B
EBITDA	3.85B	5.06B	4.85B	4.40B	6.32B	2.44B
Net Income	1.25B	2.58B	2.02B	868.00M	3.43B	-322.00M
Balance Sheet
Total Assets	77.34B	71.26B	57.15B	57.12B	57.70B	54.02B
Cash, Cash Equivalents and Short-Term Investments	4.57B	14.85B	4.27B	4.16B	4.00B	4.23B
Total Debt	23.65B	19.82B	13.52B	13.48B	14.58B	17.03B
Total Liabilities	52.94B	46.38B	35.91B	37.21B	37.68B	37.92B
Stockholders Equity	24.40B	24.82B	21.18B	19.86B	19.97B	16.05B
Cash Flow
Free Cash Flow	1.88B	1.97B	1.60B	1.47B	3.37B	-143.00M
Operating Cash Flow	2.48B	4.34B	4.43B	4.59B	5.87B	2.24B
Investing Cash Flow	-12.09B	-53.00M	-3.28B	-2.09B	-2.80B	-2.58B
Financing Cash Flow	10.40B	6.28B	-1.36B	-1.80B	-3.36B	883.00M

Hewlett Packard Enterprise Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HPE, the sentiment is Positive. The current price of 23.5 is above the 20-day moving average (MA) of 22.34, above the 50-day MA of 21.32, and above the 200-day MA of 19.37, indicating a bullish trend. The MACD of 0.76 indicates Negative momentum. The RSI at 72.35 is Negative, neither overbought nor oversold. The STOCH value of 75.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HPE.

Hewlett Packard Enterprise Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HPE	77 Outperform	$31.03B	29.70	5.37%	2.21%	14.39%	-38.96%
CSCO	75 Outperform	$264.47B	26.27	22.65%	2.42%	5.30%	3.07%
UI	72 Outperform	$34.91B	49.07	186.53%	0.45%	33.45%	103.34%
ERIC	69 Neutral	$26.97B	15.98	19.63%	3.45%	0.98%	―
NOK	62 Neutral	$24.64B	23.36	4.31%	3.37%	-2.39%	157.33%
Sector *	61 Neutral	$35.56B	8.99	-10.49%	1.86%	8.45%	-8.32%
ASTS	54 Neutral	$15.20B	―	-69.70%	―	249.43%	-50.21%

Hewlett Packard Enterprise Corporate Events

Hewlett Packard Enterprise Reports Record Q3 2025 Revenue

On September 3, 2025, Hewlett Packard Enterprise (HPE) announced its fiscal 2025 third-quarter results, highlighting record revenue of $9.1 billion, a 19% increase from the previous year, and improved profitability. The quarter was marked by the successful acquisition of Juniper Networks, which contributed to the financial results and is expected to enhance future market opportunities. The company reported strong performance in its Server and Networking segments, with significant revenue growth and profitability. HPE also declared a quarterly dividend of $0.13 per share, payable on October 17, 2025. The company remains focused on capturing market opportunities and delivering consistent shareholder value.

Hewlett Packard Enterprise to Redeem $2.5 Billion Notes

On August 18, 2025, Hewlett Packard Enterprise announced its decision to redeem all $2.5 billion of its outstanding 4.900% Notes due 2025 on September 17, 2025. This strategic financial move involves redeeming the notes at their principal amount plus accrued interest, potentially impacting the company’s financial structure and market positioning.

Hewlett Packard Enterprise Declares Cash Dividend for Series C

On July 30, 2025, Hewlett Packard Enterprise‘s Board of Directors approved a cash dividend of $0.953125 per share for its 7.625% Series C Mandatory Convertible Preferred Stock, with payment scheduled for September 1, 2025. This decision reflects the company’s commitment to returning value to its shareholders and is contingent upon the Board’s discretion and availability of legally permissible funds.

Hewlett Packard Enterprise Partners with Elliott Management

On July 16, 2025, Hewlett Packard Enterprise announced a cooperation agreement with Elliott Investment Management, which includes the appointment of Robert Calderoni to the board of directors and the formation of a new Strategy Committee to drive shareholder value. This strategic move is part of HPE’s ongoing transformation efforts and aims to enhance the company’s operational and strategic opportunities, particularly following the recent acquisition of Juniper Networks.

Hewlett Packard Enterprise Completes Merger with Juniper

On July 2, 2025, Hewlett Packard Enterprise announced the completion of its merger with Juniper, making Juniper a wholly owned subsidiary. The merger, valued at approximately $13.4 billion, was funded through a combination of cash, commercial paper issuances, and term loan credit facilities. The merger faced legal challenges when the U.S. Department of Justice sought to block it, but a settlement was reached requiring HPE to divest its Instant On business and conduct an auction for non-exclusive licensing of Juniper’s Mist AIOps source code.