Today we're going to take a closer look at large-cap Technology company Hewlett Packard Enterprise Company, whose shares are currently trading at $15.26. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
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 18.4 and a P/B ratio of 0.95.
Hewlett Packard Enterprise Company's PEG ratio is 2.2, 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.
