Hewlett Packard Enterprise (HPE) AI Stock Analysis

• Market Cap: $23.16B
• Dividend Yield: 2.95%
• Average Volume (3M): 16.10M
• Price to Earnings (P/E): 18.2
• Beta (1Y): 1.60
• Revenue Growth: 11.63%
• EPS Growth: -24.41%
• Country: US
• Employees: 61,000
• Sector: Technology
• Sector Strength: 78
• Industry: Communication Equipment
• EPS (TTM): 0.38
• Shares Outstanding: 1,312,215,600
• 10 Day Avg. Volume: 19,118,761
• 30 Day Avg. Volume: 16,096,810
• PEG Ratio: -0.56
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.46
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 0.26
• Enterprise Value/Gross Profit: 4.40
• Enterprise Value/Ebitda: 1.84
• 1Y Price Target: $21.25
• Price Target Upside: 20.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 70 Outperform
• Price Target: $19.50 ▲(10.48%Upside)

Hewlett Packard Enterprise's solid financial performance and positive earnings call results are the most significant factors contributing to its score. The stock's valuation and mixed technical indicators suggest moderate potential, while challenges in the server segment and cash flow management remain areas to watch.

Positive Factors

AI Systems Demand

HPE cumulative AI systems orders in F2Q increased to $9.3bn from $8.3bn in F1Q.

Earnings

HPE reported strong F2Q results, beating on both top-line and bottom-line.

Valuation

HPE trades at a 20% discount to DELL on a P/E basis, suggesting a compelling valuation opportunity.

Negative Factors

Future Guidance

Despite the strong guidance for F3Q, the guidance for F4Q is weaker than expected, potentially due to delays in AI server deals.

Revenue Growth

Hewlett Packard Enterprise's F25 revenue growth range was lowered due to external factors, including changes in foreign exchange impacts.

Hewlett Packard Enterprise Business Overview & Revenue Model

Company Description

Hewlett Packard Enterprise (HPE) is a global technology company that provides cutting-edge solutions in the enterprise IT sector. Known for its focus on innovation and digital transformation, HPE offers a wide range of products and services, including servers, storage systems, networking equipment, and software solutions. The company also provides consulting and support services, enabling organizations to optimize their IT environments and accelerate their digital transformation journeys. HPE operates across various sectors, including telecommunications, finance, healthcare, and government, helping businesses leverage technology to achieve their strategic objectives.

How the Company Makes Money

Hewlett Packard Enterprise makes money through a diversified revenue model that includes the sale of hardware, software, and services. A significant portion of its revenue comes from its Hybrid IT segment, which includes servers, storage, and data center networking solutions. HPE also generates income through its Intelligent Edge segment, offering edge computing and IoT solutions, and its Financial Services segment, which provides leasing and financial management services. Additionally, HPE capitalizes on strategic partnerships with other technology firms and service providers, enhancing its product offerings and expanding its market reach. The company also offers subscription-based services and cloud solutions, creating recurring revenue streams that contribute to its financial performance.

Hewlett Packard Enterprise Financial Statement Overview

Summary

Hewlett Packard Enterprise demonstrates solid financial performance with consistent revenue growth and profitability. The balance sheet reflects a stable financial position with manageable leverage and good equity returns. Cash flow generation is strong, supporting operational needs and growth initiatives. However, monitoring cost management and enhancing cash flow efficiency could further strengthen its financial standing.

Income Statement

Hewlett Packard Enterprise shows a steady revenue growth with a 3.58% increase in TTM compared to the previous year. The Gross Profit Margin stands at 48.65%, indicating effective cost management. The Net Profit Margin of 8.86% is healthy, reflecting strong profitability. EBIT and EBITDA margins of 6.90% and 13.59% respectively, reveal solid operational efficiency. However, the slight decline in EBIT margin from 7.27% in the previous year suggests potential cost pressures.

Balance Sheet

The company maintains a moderate Debt-to-Equity Ratio of 0.71, showing a balanced leverage. The Return on Equity (ROE) is robust at 10.96%, demonstrating effective use of shareholders' equity to generate profits. The Equity Ratio of 35.86% indicates a stable financial structure, though slightly lower compared to industry peers, suggesting room for improvement in asset financing.

Cash Flow

Hewlett Packard Enterprise's Free Cash Flow grew by 10.24% in the TTM, highlighting strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio of 1.41 reflects efficient cash conversion from earnings. The Free Cash Flow to Net Income Ratio of 0.79 indicates a healthy cash flow relative to profits, though there is room to enhance cash conversion efficiency.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
31.65B	30.13B	29.14B	28.50B	27.78B	26.98B
	Gross Profit
7.34B	9.84B	10.24B	9.51B	9.38B	8.47B
	EBIT
1.83B	2.19B	2.09B	3.60B	2.43B	3.41B
	EBITDA
2.67B	5.02B	5.06B	4.78B	4.85B	4.26B
	Net Income Common Stockholders
1.43B	2.58B	2.02B	868.00M	3.43B	-322.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.67B	14.85B	4.27B	4.16B	4.00B	4.23B
	Total Assets
67.85B	71.26B	57.15B	57.12B	57.70B	54.02B
	Total Debt
17.53B	18.25B	13.52B	12.46B	13.45B	15.94B
	Net Debt
5.86B	3.40B	9.24B	8.30B	9.45B	11.71B
	Total Liabilities
43.99B	46.38B	35.91B	37.21B	37.68B	37.92B
	Stockholders Equity
23.87B	24.82B	21.18B	19.86B	19.97B	16.05B
Cash Flow		Free Cash Flow
1.18B	1.97B	1.60B	1.47B	3.37B	-143.00M
	Operating Cash Flow
2.33B	4.34B	4.43B	4.59B	5.87B	2.24B
	Investing Cash Flow
42.00M	-53.00M	-3.28B	-2.09B	-2.80B	-2.58B
	Financing Cash Flow
6.47B	6.28B	-1.36B	-1.80B	-3.36B	883.00M

Hewlett Packard Enterprise Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.65
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HPE, the sentiment is Negative. The current price of 17.65 is below the 20-day moving average (MA) of 17.77, above the 50-day MA of 16.48, and below the 200-day MA of 19.05, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 51.78 is Neutral, neither overbought nor oversold. The STOCH value of 43.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HPE.

Hewlett Packard Enterprise Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	78 Outperform	$257.80B	26.27	21.36%	2.56%	0.47%	-17.77%
JNPR	72 Outperform	$11.96B	34.19	7.58%	2.46%	-2.56%	52.05%
HPE	70 Outperform	$23.16B	18.24	6.39%	2.95%	11.63%	-24.41%
ERIC	68 Neutral	$28.38B	178.68	1.67%	0.31%	-2.08%	―
NOK	64 Neutral	$27.61B	34.60	5.70%	3.98%	-9.96%	-6.83%
UI	63 Neutral	$24.06B	42.18	237.68%	0.60%	21.43%	56.87%
Sector *	62 Neutral	$11.80B	10.08	-7.46%	2.99%	7.37%	-8.21%

Hewlett Packard Enterprise Corporate Events

Hewlett Packard Enterprise Reports Q2 Revenue Growth

Hewlett Packard Enterprise announced its financial results for the second quarter of fiscal year 2025, reporting a 6% increase in revenue to $7.6 billion compared to the previous year. Despite a solid performance in revenue growth across its product segments, the company faced challenges with a GAAP net loss per share of $(0.82) due to a non-cash impairment of legacy goodwill. HPE continues to focus on innovation and operational efficiency to enhance shareholder value, with an estimated revenue growth of 7% to 9% for fiscal 2025.

The most recent analyst rating on (HPE) stock is a Hold with a $20.00 price target. To see the full list of analyst forecasts on Hewlett Packard Enterprise stock, see the HPE Stock Forecast page.

Hewlett Packard Enterprise Declares Dividend for Preferred Stock

On April 30, 2025, Hewlett Packard Enterprise‘s Board of Directors approved a cash dividend of $0.953125 per share for its Series C Mandatory Convertible Preferred Stock, payable on June 1, 2025. This decision reflects the company’s financial strategy and commitment to returning value to shareholders, with implications for investor confidence and market positioning.

Hewlett Packard Enterprise Approves Key Amendments at Annual Meeting

On April 2, 2025, Hewlett Packard Enterprise held its annual stockholders meeting where key amendments to its stock and employee plans were approved. The stockholders agreed to increase the shares available under the 2021 Stock Incentive Plan by 22 million and extended the 2015 Employee Share Purchase Plan by ten years. Additionally, the meeting included the election of 12 board members, ratification of Ernst & Young LLP as the accounting firm, and votes on executive compensation and lobbying transparency.