What Every Investor Must Know About HPE Stock

Hewlett Packard Enterprise Company shares fell by -6.6% during the day's evening session, and are now trading at a price of $15.23. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

Hewlett Packard Enterprise Company's Earnings and Assets May Be Undervalued:

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 belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 27.16 and an average price to book (P/B) ratio of 6.23. In contrast, Hewlett Packard Enterprise Company has a trailing 12 month P/E ratio of 18.3 and a P/B ratio of 0.95.

Hewlett Packard Enterprise Company's PEG ratio is 2.36, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Wider Gross Margins Than the Industry Average of 23.25%:

2017-12-15 2018-12-12 2019-12-13 2020-12-10 2021-12-10 2022-12-08
Revenue (MM) $28,871 $30,852 $29,135 $26,982 $27,784 $28,496
Gross Margins 30.0% 30.0% 33.0% 31.0% 34.0% 33.0%
Operating Margins 7% 8% 9% 6% 8% 8%
Net Margins 1.0% 6.0% 4.0% -1.0% 12.0% 3.0%
Net Income (MM) $344 $1,908 $1,049 -$322 $3,427 $868
Earnings Per Share $0.21 $1.23 $0.77 -$0.25 $2.57 $0.65
EPS Growth n/a 485.71% -37.4% -132.47% 1128.0% -74.71%
Diluted Shares (MM) 1,674 1,553 1,366 1,294 1,335 1,330
Free Cash Flow (MM) $3,793 $4,826 $6,256 $3,920 $8,019 $7,113
Capital Expenditures (MM) -$2,458 -$1,862 -$2,259 -$1,680 -$2,148 -$2,520
Net Current Assets (MM) -$16,457 -$16,947 -$19,511 -$21,363 -$18,804 -$16,708
Long Term Debt (MM) $10,182 $10,136 $9,395 $12,186 $9,896 $7,853
Net Debt / EBITDA 0.9 1.47 2.01 2.78 2.01 1.76

Hewlett Packard Enterprise Company has strong margins with a stable trend and exceptional EPS growth. Additionally, the company's financial statements display wider gross margins than its peer group and healthy leverage. Furthermore, Hewlett Packard Enterprise Company has weak revenue growth and a flat capital expenditure trend and irregular cash flows.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.