Examining Hewlett Packard Enterprise Value After AI and Cloud Growth Headlines in 2025

• Ever wondered if Hewlett Packard Enterprise is hiding value right under Wall Street’s nose? You’re not alone, and that is exactly what we are going to dig into.
• The stock has had a bumpy ride lately, dropping 11.1% over the last week and down 7.5% for the past month. However, it has still managed to gain 2.0% over the last year and 123.2% over five years.
• Recent headlines have spotlighted Hewlett Packard Enterprise’s strategic moves in cloud computing and artificial intelligence. This has driven speculation about future growth and has fueled both bullish and bearish sentiment, which helps explain the recent price swings.
• The company's valuation score sits at 5 out of 6, which compares well to its peers. We will dive into the traditional valuation metrics in a moment, but keep reading to find out how you can get a clearer picture of what Hewlett Packard Enterprise is really worth.

Find out why Hewlett Packard Enterprise's 2.0% return over the last year is lagging behind its peers.

Approach 1: Hewlett Packard Enterprise Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and discounting them back to today’s dollars. This helps investors gauge what a business is truly worth beyond daily market swings.

For Hewlett Packard Enterprise, the latest reported Free Cash Flow (FCF) stands at approximately -$344 Million. Analyst estimates suggest FCF could reach around $3.64 Billion by 2029, with projections continuing to climb, potentially up to $4.5 Billion by 2035, based on extrapolations. It is important to note that analyst coverage typically provides up to five years of forecasts, and Simply Wall St extrapolates further into the future to complete the full DCF outlook.

Using these cash flow estimates and discounting them at a reasonable rate, the model calculates an intrinsic value per share of $34.41. Compared to Hewlett Packard Enterprise’s current share price, this means the stock appears to be trading at a 38.3% discount to its intrinsic value, which signals that shares may be considerably undervalued according to this approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Hewlett Packard Enterprise is undervalued by 38.3%. Track this in your watchlist or portfolio, or discover 894 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hewlett Packard Enterprise.

Approach 2: Hewlett Packard Enterprise Price vs Earnings

The Price-to-Earnings (PE) ratio is a trusted yardstick for valuing profitable companies like Hewlett Packard Enterprise, because it relates a company’s share price to its actual earnings. For businesses that generate steady profits, PE helps investors see how much they are paying for each dollar of earnings.

What counts as a “fair” PE ratio depends on a few factors. Companies with stronger earnings growth prospects or lower risk typically command higher PE ratios, while slower growth or greater uncertainty might bring the expected multiple down. Industry norms and peer averages form useful reference points.

Hewlett Packard Enterprise currently trades at a PE ratio of 24.66x. This is higher than the technology industry average of 21.96x, but sits well below the average PE of its peers at 64.56x. These numbers provide useful context, but do not always tell the full story given unique company traits.

This is where Simply Wall St’s proprietary “Fair Ratio” comes in. The Fair Ratio, in this case 44.44x, adjusts for Hewlett Packard Enterprise’s particular earnings growth, profit margins, risks, industry, and market capitalization. Unlike basic comparisons with peers or industry averages, the Fair Ratio delivers a more tailored valuation benchmark and helps investors factor in the company’s own strengths and challenges.

Comparing Hewlett Packard Enterprise’s current PE of 24.66x against the Fair Ratio of 44.44x, the stock appears undervalued using this multiple-based approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1421 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Hewlett Packard Enterprise Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a simple, story-driven approach that lets you combine your perspective on Hewlett Packard Enterprise's business and future with actual numbers, such as revenue, earnings, and margins, to create a personalized forecast and fair value estimate.

Unlike traditional models, a Narrative links the company’s story (what you believe about its strategy, risks, and strengths) to concrete financial forecasts and then directly to a fair value, making it much easier to see how your assumptions play out in the real world.

Narratives are accessible and easy to use on Simply Wall St's Community page, where millions of investors update, share, and compare their views alongside key data. They update dynamically as soon as fresh news, results, or forecasts are published, so your analysis stays relevant and actionable.

For example, some investors might build a bullish Narrative for Hewlett Packard Enterprise around its leadership in AI and supercomputing, setting a high future price target of $30. Others, citing integration risks and competition, may see fair value as low as $19, demonstrating how Narratives make it simple to compare different perspectives and decide for yourself if now is the right time to buy or sell.

Do you think there's more to the story for Hewlett Packard Enterprise? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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