NYSE:HPE

Stock Analysis Report

Hewlett Packard Enterprise

Executive Summary

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data from edge to cloud.

Rewards

Trading at 37.5% below its fair value

Earnings are forecast to grow 15.44% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (3.6%) are lower than last year (6.5%)



Snowflake Analysis

Good value second-rate dividend payer.


Similar Companies

Share Price & News

How has Hewlett Packard Enterprise's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HPE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

HPE

1.4%

US Tech

1.8%

US Market


1 Year Return

-10.3%

HPE

81.9%

US Tech

20.1%

US Market

Return vs Industry: HPE underperformed the US Tech industry which returned 81.9% over the past year.

Return vs Market: HPE underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

HPEIndustryMarket
7 Day-2.0%1.4%1.8%
30 Day-4.4%1.5%1.4%
90 Day-16.4%19.9%8.8%
1 Year-7.5%-10.3%84.6%81.9%22.7%20.1%
3 Year9.4%-40.8%132.4%116.2%50.1%40.4%
5 Yearn/a149.2%124.7%72.9%53.9%

Price Volatility Vs. Market

How volatile is Hewlett Packard Enterprise's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hewlett Packard Enterprise undervalued compared to its fair value and its price relative to the market?

37.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HPE ($14.44) is trading below our estimate of fair value ($23.12)

Significantly Below Fair Value: HPE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HPE is good value based on its PE Ratio (18.6x) compared to the Tech industry average (22.1x).

PE vs Market: HPE is poor value based on its PE Ratio (18.6x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: HPE is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: HPE is good value based on its PB Ratio (1.1x) compared to the US Tech industry average (1.8x).


Next Steps

Future Growth

How is Hewlett Packard Enterprise forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HPE's forecast earnings growth (15.4% per year) is above the savings rate (1.7%).

Earnings vs Market: HPE's earnings (15.4% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: HPE's earnings are forecast to grow, but not significantly.

Revenue vs Market: HPE's revenue (0.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: HPE's revenue (0.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HPE's Return on Equity is forecast to be low in 3 years time (13.8%).


Next Steps

Past Performance

How has Hewlett Packard Enterprise performed over the past 5 years?

-14.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HPE has a large one-off loss of $1.2B impacting its October 31 2019 financial results.

Growing Profit Margin: HPE's current net profit margins (3.6%) are lower than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: HPE's earnings have declined by -14.9% per year over the past 5 years.

Accelerating Growth: HPE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HPE had negative earnings growth (-47.9%) over the past year, making it difficult to compare to the Tech industry average (0.4%).


Return on Equity

High ROE: HPE's Return on Equity (6.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hewlett Packard Enterprise's financial position?


Financial Position Analysis

Short Term Liabilities: HPE's short term assets ($15.1B) do not cover its short term liabilities ($19.2B).

Long Term Liabilities: HPE's short term assets ($15.1B) do not cover its long term liabilities ($15.5B).


Debt to Equity History and Analysis

Debt Level: HPE's debt to equity ratio (80.6%) is considered high.

Reducing Debt: HPE's debt to equity ratio has increased from 3.7% to 80.6% over the past 5 years.

Debt Coverage: HPE's debt is well covered by operating cash flow (28.9%).

Interest Coverage: HPE's interest payments on its debt are well covered by EBIT (11.8x coverage).


Balance Sheet

Inventory Level: HPE has a low level of unsold assets or inventory.

Debt Coverage by Assets: HPE's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Hewlett Packard Enterprise's current dividend yield, its reliability and sustainability?

3.32%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Hewlett Packard Enterprise before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.3%marketbottom25%1.4%markettop25%3.7%industryaverage1.1%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: HPE's dividend (3.32%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: HPE's dividend (3.32%) is low compared to the top 25% of dividend payers in the US market (3.68%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HPE has been paying a dividend for less than 10 years.

Growing Dividend: HPE's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58%), HPE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HPE's dividends in 3 years are forecast to be well covered by earnings (27.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Antonio Neri (52yo)

2yrs

Tenure

US$13,714,497

Compensation

Mr. Antonio Fabio Neri has been President of Hewlett Packard Enterprise Company since June 21, 2017. Mr. Neri has been Chief Executive Officer and Director of Hewlett Packard Enterprise Company since Febru ...


CEO Compensation Analysis

Compensation vs Market: Antonio's total compensation ($USD13.71M) is about average for companies of similar size in the US market ($USD10.82M).

Compensation vs Earnings: Antonio's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Antonio Neri
CEO, President & Director2yrsUS$13.71m0.022% $4.0m
John Schultz
Executive VP2.2yrsUS$7.28m0.032% $6.0m
Alan May
Executive VP & Chief People Officer4.7yrsUS$4.06m0.019% $3.5m
Philip Davis
President of Hybrid IT Business Group0yrsUS$6.45mno data
Tarek Robbiati
Executive VP & CFO1.4yrsUS$4.32m0.0038% $707.7k
Jeff Ricci
Senior VP4.3yrsno datano data
Mark Potter
Chief Technology Officer1.1yrsno datano data
Andrew Simanek
VP, Head of Investor Relations & Director0yrsno datano data
Rishi Varma
Senior VP0yrsno datano data
Glenn Leon
Chief Ethics & Compliance Officer0yrsno datano data

2.1yrs

Average Tenure

54yo

Average Age

Experienced Management: HPE's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Antonio Neri
CEO, President & Director2yrsUS$13.71m0.022% $4.0m
Michael Angelakis
Independent Director4.3yrsUS$342.93k0.0010% $186.7k
Gary Reiner
Independent Director4.3yrsUS$342.89k0.0075% $1.4m
Ann Livermore
Independent Director4.3yrsUS$325.01k0.0080% $1.5m
Patricia Russo
Independent Non Executive Chairman4.3yrsUS$524.98k0.0012% $220.3k
Mary Wilderotter
Independent Director4yrsUS$354.93k0.0032% $603.1k
Pamela Carter
Independent Director4.3yrsUS$348.76k0.0013% $244.6k
Raymond Ozzie
Independent Director4.3yrsUS$342.93k0.0047% $885.1k
Raymond Lane
Independent Director4.3yrsUS$324.98k0.064% $12.0m
Daniel Ammann
Independent Director4.3yrsUS$325.01k0.0036% $662.9k

4.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: HPE's board of directors are considered experienced (4.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Hewlett Packard Enterprise Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hewlett Packard Enterprise Company
  • Ticker: HPE
  • Exchange: NYSE
  • Founded: 1939
  • Industry: Technology Hardware, Storage and Peripherals
  • Sector: Tech
  • Market Cap: US$18.673b
  • Shares outstanding: 1.29b
  • Website: https://www.hpe.com

Number of Employees


Location

  • Hewlett Packard Enterprise Company
  • 6280 America Center Drive
  • San Jose
  • California
  • 95002
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2HPDB (Deutsche Boerse AG)YesCommon StockDEEUROct 2015
HPENYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2015
HPE *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 2015
0J51LSE (London Stock Exchange)YesCommon StockGBUSDOct 2015
2HPETLX (Eurotlx)YesCommon StockITEUROct 2015
HPEWBAG (Wiener Boerse AG)YesCommon StockATEUROct 2015
H1PE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data from edge to cloud. The company offers industry standard servers for multi-workload computing; mission-critical servers; storage solutions; and solutions for secondary workloads and traditional tape, storage networking, and disk products, such as HPE MSA and HPE XP. It also provides mobility and Internet of Things solutions under the Aruba brand, which include wired and wireless local area network products, such as Wi-Fi access points, switches, routers, and sensors; software products, such as cloud-based management, network management, network access control, analytics and assurance, and location services; and professional and support services, as well as as-a-service and consumption models for the intelligent edge portfolio of products. In addition, the company offers various flexible investment solutions, which comprise leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. Further, it invests in communications and media solutions, Hewlett Packard labs, and various business incubation projects. The company serves commercial and large enterprise groups, including business and public sector enterprises; and through various partners comprising resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. Hewlett Packard Enterprise Company was founded in 1939 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 01:53
End of Day Share Price2020/02/14 00:00
Earnings2019/10/31
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.