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Hewlett Packard Enterprise
(NYSE:HPE)
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Rating:66Neutral
Price Target:
$45.00
▲(70.20% Upside)
Action:Reiterated
Date:06/03/26
The score is driven primarily by strong cash flow and a highly positive, beat-and-raise earnings update with meaningfully higher FY26 FCF guidance. This is tempered by volatile profitability/ROE, extremely overbought technical conditions that elevate near-term downside risk, and a stretched valuation (high P/E with only ~1% dividend yield).
Positive Factors
Free cash flow strength
Sustained, material free cash flow (TTM $5.64B, +48%) and FCF slightly above net income signal durable cash conversion. That strengthens capacity to fund R&D, M&A, debt paydown and shareholder returns over multiple quarters, improving financial optionality and resilience.
Negative Factors
Supply & component constraints
Persistent DRAM/NAND shortages and inflationary component costs are a structural headwind that can cap revenue conversion from backlog, pressure product margins, and limit ability to scale AI/Cloud hardware sales until supplier allocations and wafer capacity normalize.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained, material free cash flow (TTM $5.64B, +48%) and FCF slightly above net income signal durable cash conversion. That strengthens capacity to fund R&D, M&A, debt paydown and shareholder returns over multiple quarters, improving financial optionality and resilience.
Read all positive factors
Hewlett Packard Enterprise Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
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The Fly
The FlyHewlett Packard Enterprise (HPE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$54.60B
Dividend Yield2.17%
Average Volume (3M)34.14M
Price to Earnings (P/E)37.8
Beta (1Y)1.52
Revenue Growth23.33%
EPS Growth2.87%
CountryUS
Employees61,000
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)1.09
Shares Outstanding1,324,203,500
10 Day Avg. Volume31,560,244
30 Day Avg. Volume34,140,747
Financial Highlights & Ratios
PEG Ratio5.35
Price to Book (P/B)1.31
Price to Sales (P/S)0.94
P/FCF Ratio51.57
Enterprise Value/Market Cap1.46
Enterprise Value/Revenue2.05
Enterprise Value/Gross Profit6.23
Enterprise Value/Ebitda19.88
Forecast
1Y Price Target
$67.73Price Target Upside156.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)3.41
Revenue Forecast (FY)$44.94B
Hewlett Packard Enterprise Business Overview & Revenue Model
Company Description
Hewlett Packard Enterprise (HPE) is a global technology firm that provides comprehensive solutions, empowering clients across the Americas, Europe, the Middle East, Africa, Asia Pacific, and Japan to efficiently capture, analyze, and utilize their...
How the Company Makes Money
HPE primarily makes money by selling enterprise IT infrastructure and associated software and services, with revenue generally coming from a mix of product sales, recurring services, and consumption-based offerings. Key revenue streams include: (1...
Hewlett Packard Enterprise Earnings Call Summary
Earnings Call Date:Jun 01, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 01, 2026
Earnings Call Sentiment Positive
The call communicated a strong beat-and-raise quarter with record revenue, outsized EPS growth, substantial free cash flow, robust orders and backlog, successful Juniper integration, and elevated guidance for fiscal 26 (including higher EPS and FCF). Key challenges center on supply constraints, component inflation, inventory/receivable timing, and the lumpiness of large AI system deals that can delay revenue conversion. Given the breadth and scale of positive operational and financial developments and management's confidence in synergy realization and durable demand, the highlights materially outweigh the lowlights.Positive Updates
Record Revenue and Strong Top-Line Growth
Total revenue reached $10.7 billion, up 40% year-over-year, coming in above the high end of guidance and showing broad-based demand across the portfolio.
Negative Updates
Inventory Build and Receivables Impacting Cash Cycle
Inventory rose to £9 billion year-over-year to support second-half AI installations and targeted commodity purchases; days receivable increased by 5 days and inventory increased, partially offsetting a modest 2-day improvement in cash conversion cycle.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and Strong Top-Line Growth
Total revenue reached $10.7 billion, up 40% year-over-year, coming in above the high end of guidance and showing broad-based demand across the portfolio.
Read all positive updates
Company Guidance
HPE materially tightened and raised its targets: Q3 revenue $11.5–$12.1B with Q3 EPS $0.88–$0.93 (GAAP $0.84–$0.89); Q3 networking revenue guide 73–78% year‑over‑year reported (≈10% normalized) and Cloud & AI revenue in the high‑teens. For fiscal 2026 HPE now expects non‑GAAP EPS $3.35–$3.45 (GAAP $2.42–$2.52), consolidated revenue growth 29–33% reported (high‑teens normalized), consolidated operating profit growth 80–85% reported, networking revenue 72–75% reported (≈10% normalized), Cloud & AI revenue in the low‑20% range with Cloud & AI operating margin in the low‑ to mid‑teens, networking operating margin improving toward the mid‑to‑high‑20s, OI&E $420–$460M, and at least $3.5B of free cash flow (up from ≥$2B), with a target to reach ~2.0x net leverage by the end of FY26; the initial FY27 framework targets consolidated revenue growth of 8–12% (both segments similar), company operating margin 12–16%, networking margin mid‑to‑high‑20s, Cloud & AI margin 10–15%, EPS growth 12–16% and at least $4.5B FCF with a plan to return ≥75% of FCF once leverage goal is met.Hewlett Packard Enterprise Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
58
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 38.88B | 34.30B | 30.07B | 29.11B | 28.11B | 27.86B |
| Gross Profit | 12.80B | 9.87B | 9.55B | 9.92B | 8.82B | 9.10B |
| EBITDA | 4.01B | 2.63B | 5.56B | 4.85B | 4.40B | 6.32B |
| Net Income | 1.52B | 57.00M | 2.58B | 2.02B | 868.00M | 3.43B |
Balance Sheet | ||||||
| Total Assets | 79.51B | 75.91B | 71.26B | 57.15B | 57.12B | 57.70B |
| Cash, Cash Equivalents and Short-Term Investments | 5.29B | 5.77B | 14.85B | 4.27B | 4.16B | 4.00B |
| Total Debt | 21.25B | 24.08B | 19.82B | 13.52B | 13.48B | 14.58B |
| Total Liabilities | 54.22B | 51.15B | 46.38B | 35.91B | 37.21B | 37.68B |
| Stockholders Equity | 25.29B | 24.69B | 24.82B | 21.18B | 19.86B | 19.97B |
Cash Flow | ||||||
| Free Cash Flow | 5.64B | 627.00M | 1.97B | 1.60B | 1.47B | 3.37B |
| Operating Cash Flow | 6.36B | 2.92B | 4.34B | 4.43B | 4.59B | 5.87B |
| Investing Cash Flow | -13.17B | -13.19B | -53.00M | -3.28B | -2.09B | -2.80B |
| Financing Cash Flow | 447.00M | 1.05B | 6.28B | -1.36B | -1.80B | -3.36B |
Hewlett Packard Enterprise Technical Analysis
Positive
26.44
Price Trends
39.29
Positive
31.10
Positive
27.06
Positive
Market Momentum
0.95
Positive
42.30
Neutral
19.47
Positive
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 26.44 is below the 20-day moving average (MA) of 47.23, below the 50-day MA of 39.29, and below the 200-day MA of 27.06, indicating a neutral trend. The MACD of 0.95 indicates Positive momentum. The RSI at 42.30 is Neutral, neither overbought nor oversold. The STOCH value of 19.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HPE.
Hewlett Packard Enterprise Risk Analysis
Hewlett Packard Enterprise disclosed 32 risk factors in its most recent earnings report. Hewlett Packard Enterprise reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hewlett Packard Enterprise Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $444.16B | 37.31 | 25.14% | 2.09% | 9.21% | 25.97% | |
72 Outperform | $36.76B | 13.99 | 25.11% | 2.51% | 4.40% | 1595.74% | |
71 Outperform | $71.26B | 76.60 | 5.06% | 2.26% | 12.83% | 9.07% | |
66 Neutral | $54.60B | 37.81 | 6.12% | 2.17% | 23.33% | 2.87% | |
62 Neutral | $31.80B | 33.72 | 101.45% | 0.49% | 33.34% | 71.52% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
52 Neutral | $33.04B | -47.29 | -32.33% | ― | 1732.08% | 11.19% |
* Technology Sector Average
HPE
Hewlett Packard Enterprise
41.23
20.75
101.28%
CSCO
Cisco Systems
112.69
44.91
66.25%
ERIC
Telefonaktiebolaget LM Ericsson
10.79
2.43
29.04%
NOK
Nokia
12.07
7.04
139.86%
UI
Ubiquiti Networks
525.38
109.71
26.39%
ASTS
AST SpaceMobile
85.13
39.44
86.32%
Hewlett Packard Enterprise Corporate Events
Business Operations and StrategyExecutive/Board ChangesDividendsFinancial DisclosuresM&A Transactions
HPE Delivers Record Q2 Results and Raises Outlook
Positive
Jun 1, 2026
HPE reported record fiscal 2026 second-quarter results for the period ended April 30, 2026, with revenue up 40% year-on-year to $10.7 billion, sharply higher gross margins, and non-GAAP EPS of $0.79, supported by strong performance in Networking a...
Business Operations and StrategyM&A Transactions
Hewlett Packard Enterprise Monetizes H3C Stake in China
Positive
May 14, 2026
On May 13, 2026, Hewlett Packard Enterprise completed the sale of 13.8% of the issued share capital of its Chinese joint venture H3C Technologies to a consortium of China-based investors for about $986.8 million, executing share purchase agreement...
Dividends
Hewlett Packard Enterprise Declares Dividend on Series C Preferred
Positive
May 4, 2026
On May 4, 2026, Hewlett Packard Enterprise’s board approved a cash dividend of $0.953125 per share on its 7.625% Series C Mandatory Convertible Preferred Stock, payable June 1, 2026, to shareholders of record as of May 15, 2026. The move und...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.