Hewlett Packard Enterprise (HPE): Evaluating Valuation Following Upbeat Results, Upgraded Guidance, and Juniper Integration Progress

If you have been watching Hewlett Packard Enterprise (HPE) lately, you know things are starting to get interesting. The company just posted results that topped estimates and, in a move that caught many off-guard, sharply raised its full-year revenue growth outlook. At the same time, HPE has tapped Phil Mottram to take the reins as Chief Sales Officer, targeting further gains in its faster-growing AI and networking segments. This is thanks in part to the Juniper Networks deal, which is now fueling stronger performance in those areas. For investors on the fence, these are changes that demand a closer look.

Stack this news against the broader backdrop: HPE’s stock has trended up for much of the year, with momentum accelerating in the last quarter and the price reaching record highs. Alongside outperformance in AI systems and its recent acquisition of Juniper Networks, HPE’s long-term returns have been strong. Total return is up 37% in the past year and more than 128% over three years. After years of transition, the company’s story is shifting, with increased visibility into growth and cost synergies finally hitting the bottom line.

This brings us to the big question: Is all this progress already baked into HPE’s current share price, or could the market still be underestimating its future growth potential?

Most Popular Narrative: 2.5% Undervalued

According to the most widely followed narrative, Hewlett Packard Enterprise shares are trading below their estimated fair value. This narrative incorporates analyst estimates of forward earnings, margins, and revenue growth to support its outlook.

Strategic acquisitions and expansion in high-growth technologies, including the integration of Juniper, launches of next-gen Gen12 servers, and AI-driven management platforms, are enhancing HPE's competitive positioning in edge, networking, and AI. This foundation is laying the groundwork for continued share gains and outsized revenue growth relative to traditional industry averages.

How does this narrative see so much upside for HPE? Is there a secret ingredient behind their undervaluation call? There is: bold projections on future profits and what multiple those profits deserve. If you want to understand the numbers and assumptions that have analysts this excited, you need to see how their math adds up. Do not miss the details hidden behind this fair value estimate.

Result: Fair Value of $25.82 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution missteps in integrating Juniper or continued weakness in HPE's core server business could challenge the bullish outlook and limit margin expansion.

Find out about the key risks to this Hewlett Packard Enterprise narrative.

Another View: Expensive by Earnings Ratio

Looking at Hewlett Packard Enterprise's valuation through the lens of its price-to-earnings ratio, a different picture emerges. When compared to the tech industry, HPE appears expensive based on this metric. Could the market be too optimistic?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Hewlett Packard Enterprise to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Hewlett Packard Enterprise Narrative

If you see things differently or want to dig into the details yourself, you can shape your own take on HPE's future in just a few minutes. Do it your way

A great starting point for your Hewlett Packard Enterprise research is our analysis highlighting 2 key rewards and 5 important warning signs that could impact your investment decision.

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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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