Hewlett Packard Enterprise (HPE) AI Stock Analysis

• Market Cap: $18.57B
• Dividend Yield: 3.08%
• Average Volume (3M): 27.88M
• Price to Earnings (P/E): 7.0
• Beta (1Y): 1.70
• Revenue Growth: 10.93%
• EPS Growth: 43.19%
• Country: US
• Employees: 61,000
• Sector: Technology
• Sector Strength: 68
• Industry: Communication Equipment
• EPS (TTM): 0.49
• Shares Outstanding: 1,313,578,200
• 10 Day Avg. Volume: 29,962,274
• 30 Day Avg. Volume: 27,884,611
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.68
• Price to Cash Flow (P/CF): -13.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.70
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 3.21
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $17.56
• Price Target Upside: 4.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

Hewlett Packard Enterprise shows solid financial health with consistent revenue and cash flow growth. Its attractive valuation offers potential upside. Despite positive strategic initiatives and shareholder returns, technical analysis suggests caution due to mixed signals and short-term resistance. Key risks include server segment challenges and margin pressures.

Positive Factors

AI and Technology

GreenLake is gaining momentum as customers seek hybrid environments to prepare infrastructure for GenAI.

Operational Improvements

Recent reorganization announcements are viewed as a step towards progress in optimizing costs across the organization.

Valuation

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

Negative Factors

Competitive Positioning

HPE's positioning in AI lags behind competitors, as seen in AI server sales compared to peers like Dell.

Efficiency and Shareholder Relations

HPE has been trading at a discount to peers due to a history of being less shareholder-friendly and less efficient than competitors.

Shareholder Actions

The pending acquisition of Juniper limits HPE's ability to carry out more shareholder-friendly actions like share repurchases.

Hewlett Packard Enterprise Business Overview & Revenue Model

Company Description

Hewlett Packard Enterprise (HPE) is a global technology company specializing in developing and providing enterprise products and solutions. Operating in sectors such as IT infrastructure, cloud services, and software, HPE focuses on offering a comprehensive portfolio of solutions that enable organizations to optimize their IT environments. Their core products and services include servers, storage systems, networking products, and software solutions that cater to the needs of businesses for digital transformation.

How the Company Makes Money

Hewlett Packard Enterprise makes money through a diversified revenue model that includes the sale of IT hardware, software, and services. Key revenue streams for HPE include its Hybrid IT segment, which offers data center hardware like servers and storage solutions. Additionally, HPE generates income through its Intelligent Edge segment, which encompasses networking products, and its Financial Services division, providing financing and asset management solutions. Significant partnerships with technology companies and service providers also contribute to HPE's earnings by expanding its market reach and enhancing its product offerings. Furthermore, HPE's focus on subscription-based and as-a-service models, such as 'HPE GreenLake,' provides recurring revenue streams, aligning with the growing demand for flexible IT consumption models.

Hewlett Packard Enterprise Financial Statement Overview

Summary

Hewlett Packard Enterprise demonstrates consistent revenue growth, strong profitability, and robust cash flow generation. The balance sheet is stable with moderate leverage and good equity returns. However, there's room for improvement in cost management and 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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
30.13B	29.14B	28.50B	27.78B	26.98B
	Gross Profit
9.84B	10.24B	9.51B	9.38B	8.47B
	EBIT
2.19B	2.09B	3.60B	2.43B	3.41B
	EBITDA
5.02B	5.06B	4.78B	4.85B	4.26B
	Net Income Common Stockholders
2.58B	2.02B	868.00M	3.43B	-322.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.85B	4.27B	4.16B	4.00B	4.23B
	Total Assets
71.26B	57.15B	57.12B	57.70B	54.02B
	Total Debt
18.25B	13.52B	12.46B	13.45B	15.94B
	Net Debt
3.40B	9.24B	8.30B	9.45B	11.71B
	Total Liabilities
46.38B	35.91B	37.21B	37.68B	37.92B
	Stockholders Equity
24.82B	21.18B	19.86B	19.97B	16.05B
Cash Flow		Free Cash Flow
1.97B	1.60B	1.47B	3.37B	-143.00M
	Operating Cash Flow
4.34B	4.43B	4.59B	5.87B	2.24B
	Investing Cash Flow
-53.00M	-3.28B	-2.09B	-2.80B	-2.58B
	Financing Cash Flow
6.28B	-1.36B	-1.80B	-3.36B	883.00M

Hewlett Packard Enterprise Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 16.86
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 16.86 is above the 20-day moving average (MA) of 15.02, above the 50-day MA of 16.16, and below the 200-day MA of 19.18, indicating a neutral trend. The MACD of 0.18 indicates Negative momentum. The RSI at 60.16 is Neutral, neither overbought nor oversold. The STOCH value of 87.28 is Negative, 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	75 Outperform	$236.03B	26.00	20.02%	2.71%	-5.34%	-30.57%
HPE	70 Outperform	$18.57B	7.00	12.09%	3.08%	10.93%	43.19%
JNPR	68 Neutral	$12.24B	42.57	7.58%	2.40%	-8.82%	-10.01%
ERIC	68 Neutral	$24.13B	12,150.00	1.67%	2.16%	-2.08%	―
UI	67 Neutral	$20.73B	46.61	323.87%	0.70%	14.59%	19.51%
NOK	64 Neutral	$25.97B	33.73	5.70%	1.99%	-9.96%	-6.83%
Sector *	60 Neutral	$10.94B	10.58	-7.08%	2.98%	7.52%	-12.04%

Hewlett Packard Enterprise Corporate Events

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.

Spark’s Take on HPE Stock

According to Spark, TipRanks’ AI Analyst, HPE is a Neutral.

Hewlett Packard Enterprise’s stock demonstrates a solid financial foundation with strong revenue growth and profitability. The stock’s valuation is attractive, indicating it may be undervalued. However, technical analysis suggests bearish trends, and challenges in the server segment pose risks to future performance. The company’s optimistic guidance and strategic initiatives in AI and GreenLake provide potential for long-term growth, but margin pressures and competitive challenges need close monitoring.

To see Spark’s full report on HPE stock, click here.

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.