Hewlett Packard Enterprise (HPE) AI Stock Analysis

• Market Cap: $27.77B
• Dividend Yield: 2.46%
• Average Volume (3M): 16.34M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 1.64
• Revenue Growth: 11.63%
• EPS Growth: -24.41%
• Country: US
• Employees: 61,000
• Sector: Technology
• Sector Strength: 89
• Industry: Communication Equipment
• EPS (TTM): 0.38
• Shares Outstanding: 1,312,215,600
• 10 Day Avg. Volume: 14,909,800
• 30 Day Avg. Volume: 16,336,736
• 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: 0.98
• Enterprise Value/Revenue: 0.86
• Enterprise Value/Gross Profit: 3.71
• Enterprise Value/Ebitda: 10.22
• 1Y Price Target: $24.54
• Price Target Upside: 15.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 73 Outperform
• Price Target: $23.50 ▲(11.06% Upside)

Hewlett Packard Enterprise is well-positioned with its strong financial performance and positive technical indicators. The robust earnings call results and strategic corporate events further enhance the stock's outlook. However, valuation concerns and challenges in specific segments temper the score. Continued focus on strategic growth in AI and cloud services, along with operational improvements, are crucial for sustaining momentum.

Positive Factors

Acquisition Benefits

The Juniper acquisition favorably positions HPE to benefit from secular AI/enterprise networking and edge compute growth drivers.

Financial Performance

The increasing mix of higher-margin networking revenues and cost synergies provide a pathway for significant upside potential for the shares.

Negative Factors

Execution Risks

Execution risks are likely to be top of mind for investors, with concerns about execution, cash restructuring charges, and management changes post-acquisition.

Investor Concerns

Concerns about execution remain a watchpoint, likely leading investors to gradually warm up to the higher earnings multiple.

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 exhibits solid financial performance with steady revenue growth and healthy profitability margins. The balance sheet shows a stable financial structure with moderate leverage, though there is room for improvement in asset financing. Cash flow generation is strong, but there is potential to enhance cash conversion efficiency.

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
EBITDA	2.67B	5.02B	5.06B	4.78B	4.85B	4.26B
Net Income	1.43B	2.58B	2.02B	868.00M	3.43B	-322.00M
Balance Sheet
Total Assets	67.85B	71.26B	57.15B	57.12B	57.70B	54.02B
Cash, Cash Equivalents and Short-Term Investments	11.67B	14.85B	4.27B	4.16B	4.00B	4.23B
Total Debt	17.53B	19.82B	13.52B	13.48B	14.58B	17.03B
Total Liabilities	43.93B	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	107.00M	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: Positive
• Last Price: 21.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 21.16 is above the 20-day moving average (MA) of 20.72, above the 50-day MA of 19.94, and above the 200-day MA of 19.20, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 62.83 is Neutral, neither overbought nor oversold. The STOCH value of 81.63 is Negative, 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
CSCO	77 Outperform	$262.15B	25.36	22.58%	2.42%	5.30%	3.07%
UI	74 Outperform	$24.37B	44.40	237.68%	0.59%	21.43%	56.87%
HPE	73 Outperform	$27.77B	21.86	6.39%	2.46%	11.63%	-24.41%
ERIC	69 Neutral	$25.99B	15.38	19.63%	3.54%	0.98%	―
NOK	57 Neutral	$22.80B	21.56	4.31%	3.64%	-2.39%	157.33%
Sector *	50 Neutral	AU$1.64B	3.32	-0.63%	3.34%	15.95%	-3.56%

Hewlett Packard Enterprise Corporate Events

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.

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.