Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Let’s talk about the popular Hewlett Packard Enterprise Company (NYSE:HPE). The company’s shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $16.8 at one point, and dropping to the lows of $14.13. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hewlett Packard Enterprise’s current trading price of $14.13 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hewlett Packard Enterprise’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Hewlett Packard Enterprise worth?
According to my valuation model, Hewlett Packard Enterprise seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Hewlett Packard Enterprise today, you’d be paying a fair price for it. And if you believe that the stock is really worth $17.04, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Hewlett Packard Enterprise’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Hewlett Packard Enterprise?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Hewlett Packard Enterprise’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? HPE’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on HPE, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Hewlett Packard Enterprise. You can find everything you need to know about Hewlett Packard Enterprise in the latest infographic research report. If you are no longer interested in Hewlett Packard Enterprise, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.