Hewlett Packard Enterprise (HPE) AI Stock Analysis

• Market Cap: $28.53B
• Dividend Yield: 2.17%
• Average Volume (3M): 16.03M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.76
• Revenue Growth: 14.17%
• EPS Growth: -102.25%
• Country: US
• Employees: 61,000
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.62
• Shares Outstanding: 1,328,808,500
• 10 Day Avg. Volume: 14,340,435
• 30 Day Avg. Volume: 16,033,341
• PEG Ratio: -5.55
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 51.57
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 1.32
• Enterprise Value/Gross Profit: 4.59
• Enterprise Value/Ebitda: 17.22
• 1Y Price Target: $26.54
• Price Target Upside: 23.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 2.34
• Revenue Forecast (FY): $40.73B

• Rating: 67 Neutral
• Price Target: $22.50 ▲(4.80% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is driven mainly by moderate financial performance (strong cash flow but sharply weaker profitability) and a very strong earnings call with raised guidance and networking-led growth; these positives are tempered by weak technical momentum and a negative P/E that reflects ongoing profitability concerns.

Positive Factors

Strong free cash flow generation

Sustained FCF growth (55.6%) provides durable internal funding for R&D, integration of acquisitions, share actions or debt reduction. Strong cash conversion improves financial flexibility and supports multi-quarter investments in AI infrastructure and GreenLake expansion without relying on external capital.

Networking strength from Juniper acquisition

A large, higher-margin networking business (23% segment operating margin) materially improves HPE’s product mix and competitive position. Successful Juniper integration expands TAM, recurring enterprise contracts, and positions HPE as a more strategic networking and AI infrastructure provider over the coming quarters.

Rapid ARR and GreenLake subscription growth

62% ARR growth to $3.2B signals accelerating subscription/consumption revenue and stronger customer stickiness. Recurring GreenLake revenue smooths cash flows, increases visibility into future revenues, and supports margin expansion as software and services mix grows over multiple quarters.

Negative Factors

Deteriorating profitability and margins

Sharp margin erosion and a near-zero net margin reduce earnings resiliency and ROE, limiting internally generated capital for long-term investments. Persistent margin weakness can force structural cost actions or asset sales to restore profitability, affecting execution over several quarters.

Higher leverage

Elevated debt-to-equity (~0.91) constrains financial flexibility and raises interest burden risk. Higher leverage can limit options for opportunistic M&A or large buybacks and requires focus on deleveraging, which may redirect cash flow away from growth initiatives for multiple quarters.

Pressure in core server/hybrid business and commodity costs

Declines in server and hybrid cloud sales expose HPE’s core hardware revenue to demand shifts. Coupled with expected rising DRAM/NAND costs, this risks persistent margin pressure and could slow refresh cycles and attach rates, weakening the durable revenue base until demand stabilizes.

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 multiple streams, primarily from the sale of hardware, software, and services. Key revenue streams include the sale of servers, storage solutions, networking equipment, and software licenses. In addition, HPE offers consulting services and support through its IT services division. The company has made significant investments in hybrid cloud solutions, which have become a growing revenue driver as businesses increasingly seek flexible and scalable IT infrastructure. Strategic partnerships with major cloud providers and technology firms, such as Microsoft and Intel, further enhance HPE's market presence and revenue potential. Subscription-based models and as-a-service offerings are also contributing to recurring revenue, allowing HPE to capitalize on the shift towards pay-per-use consumption models in the technology sector.

Hewlett Packard Enterprise Financial Statement Overview

Summary

Moderate fundamentals: revenue growth and strong free cash flow (55.6% FCF growth) are positives, but profitability has deteriorated sharply (net margin down to 0.17% and EBIT margin turning negative) alongside higher leverage (debt-to-equity 0.91) and much lower ROE.

Income Statement

Hewlett Packard Enterprise has shown consistent revenue growth over the years, with a 3.88% increase in the latest annual report. However, the net profit margin has significantly decreased to 0.17% from 8.56% in the previous year, indicating a decline in profitability. The gross profit margin remains stable, but the EBIT margin has turned negative, suggesting operational challenges. Overall, while revenue growth is positive, declining profitability metrics are a concern.

Balance Sheet

The company's debt-to-equity ratio has increased to 0.91, indicating higher leverage, but it remains manageable. Return on equity has significantly decreased to 0.23% from 10.39%, reflecting reduced profitability. The equity ratio is stable, suggesting a balanced asset structure. While the balance sheet shows stability, the increased leverage and reduced ROE are potential risks.

Cash Flow

Hewlett Packard Enterprise has demonstrated strong free cash flow growth of 55.60%, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.12, suggesting efficient cash flow management. The free cash flow to net income ratio is 1.0, highlighting robust cash flow relative to net income. Overall, the cash flow statement reflects strong cash generation and management.

Breakdown	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	34.30B	30.07B	29.11B	28.11B	27.86B
Gross Profit	9.87B	9.55B	9.92B	8.82B	9.10B
EBITDA	2.63B	5.56B	4.85B	4.40B	6.32B
Net Income	57.00M	2.58B	2.02B	868.00M	3.43B
Balance Sheet
Total Assets	75.91B	71.26B	57.15B	57.12B	57.70B
Cash, Cash Equivalents and Short-Term Investments	5.77B	14.85B	4.27B	4.16B	4.00B
Total Debt	22.36B	19.82B	13.52B	13.48B	14.58B
Total Liabilities	51.15B	46.38B	35.91B	37.21B	37.68B
Stockholders Equity	24.69B	24.82B	21.18B	19.86B	19.97B
Cash Flow
Free Cash Flow	627.00M	1.97B	1.60B	1.47B	3.37B
Operating Cash Flow	2.92B	4.34B	4.43B	4.59B	5.87B
Investing Cash Flow	-13.19B	-53.00M	-3.28B	-2.09B	-2.80B
Financing Cash Flow	1.05B	6.28B	-1.36B	-1.80B	-3.36B

Hewlett Packard Enterprise Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 21.47
• 50DMA: Negative
• 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 Neutral. The current price of 21.47 is below the 20-day moving average (MA) of 22.05, below the 50-day MA of 22.54, and below the 200-day MA of 21.71, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 46.96 is Neutral, neither overbought nor oversold. The STOCH value of 37.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HPE.

Hewlett Packard Enterprise Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	74 Outperform	$313.86B	27.95	24.34%	2.09%	8.91%	14.53%
UI	74 Outperform	$46.42B	52.27	136.08%	0.49%	36.77%	102.83%
ERIC	70 Outperform	$38.49B	13.37	―	2.51%	1.04%	―
HPE	67 Neutral	$28.53B	-281.76	0.23%	2.17%	14.17%	-102.25%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ASTS	60 Neutral	$29.09B	-63.60	-39.22%	―	641.24%	41.70%
NOK	59 Neutral	$42.67B	58.89	3.20%	2.26%	5.05%	115.92%

Hewlett Packard Enterprise Corporate Events

HPE Board Declares Dividend on Series C Preferred Stock

On February 4, 2026, HPE’s board declared a $0.953125 per-share dividend on its 7.625% Series C Mandatory Convertible Preferred Stock, payable March 1 to holders of record February 15, reinforcing its commitment to preferred shareholders while remaining subject to available funds and board discretion.

The most recent analyst rating on (HPE) stock is a Hold with a $23.50 price target. To see the full list of analyst forecasts on Hewlett Packard Enterprise stock, see the HPE Stock Forecast page.

Hewlett Packard Enterprise Reports Record Q4 2025 Revenue

On December 4, 2025, Hewlett Packard Enterprise (HPE) announced its financial results for the fourth quarter of fiscal 2025, highlighting a record quarterly revenue of $9.7 billion, a 14% increase from the previous year. The company also reported a significant rise in its annualized revenue run-rate and gross margins. HPE completed the acquisition of Juniper Networks and expanded its AI and cloud businesses, which contributed to its strong performance and strategic momentum. The company raised its fiscal year 2026 guidance for diluted net earnings per share and free cash flow, reflecting confidence in its operational discipline and cost management initiatives.

The most recent analyst rating on (HPE) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Hewlett Packard Enterprise stock, see the HPE Stock Forecast page.

HPE Subsidiary Sells 9% Stake in H3C Technologies

On November 28, 2025, H3C Holdings Limited, a subsidiary of Hewlett Packard Enterprise, entered into share purchase agreements with three Chinese entities to sell 9% of H3C Technologies’ share capital for approximately $643 million. This transaction, subject to various conditions and governmental approvals, is part of a strategic move to adjust HPE’s holdings in H3C, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (HPE) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Hewlett Packard Enterprise stock, see the HPE Stock Forecast page.