Fundamentals snapshot
HPE · NYQ · Technology · Communication Equipment
Current price
$49.20
52-week range
$17.49 - $64.25
Market cap
$65.15B
One-glance verdict
Fair-value range $3.01 – $19.98 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $60.77 (588.0% higher than our fair-value estimate)
Buy below $7.07 for a 20% safety cushion
Balance sheet
Net debt $16.01B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
What this company does
Hewlett Packard Enterprise (HPE) provides large organizations with powerful computers (called servers), data storage, and networking equipment that form the backbone of their operations. The company is increasingly focused on its GreenLake platform, which allows customers to pay for technology as a subscription service instead of buying equipment all at once. This strategy is important because it creates predictable recurring revenue (income that comes in regularly, like a phone bill) for HPE, making its business less dependent on one-time hardware sales.
Hewlett Packard Enterprise (HPE) was born in 2015 when the original Hewlett-Packard Company, a business started in a Palo Alto garage in 1939, split into two separate entities. HPE took over the part of the business that sells technology to other companies, like servers and networking gear. The other company, HP Inc., kept the business of selling personal computers and printers to consumers. Since the split, HPE has focused on providing the behind-the-scenes technology that powers businesses and other large organizations.
Think of HPE as a company that builds and manages the powerful computer systems that other businesses rely on to operate. They don't sell laptops or phones to individuals, but instead provide the essential technology like servers (powerful computers that store and process large amounts of data), data storage systems, and networking equipment that allows information to flow. Their customers are typically large companies, government agencies, and other organizations that need robust and secure technology to run their daily operations, from a local coffee shop's Wi-Fi to massive data centers.
This is HPE's largest business segment, making up about half of the company's revenue. It sells powerful computers called servers, which are the workhorses of the digital world, running applications and storing massive amounts of information for businesses. This includes everything from general-purpose servers to highly specialized systems for complex tasks like artificial intelligence (AI) and scientific research. Companies buy these servers to power their websites, manage their internal data, and run the software they use every day.
This fast-growing part of HPE provides the gear that connects computers and devices together, like Wi-Fi systems, switches, and routers. A big part of this segment is a company called Aruba Networks, which HPE acquired, that specializes in secure and intelligent wireless networking for places like offices, campuses, and stores. Businesses pay for this equipment and related software to ensure their employees and customers have reliable and secure internet access and to connect all their different technology systems.
This segment helps businesses manage their technology in a 'hybrid' way, meaning some of their data and applications are stored on their own servers (on-premises) and some are in the public cloud (like Amazon Web Services or Microsoft Azure). A key offering here is HPE GreenLake, which allows customers to use HPE's technology in their own data centers but pay for it as a service, similar to how you'd pay for a cloud subscription. This provides businesses with the flexibility of the cloud while keeping their data and applications in their own control.
This division acts like a bank for HPE's customers, offering financing and leasing options to help them afford the technology they need. Instead of paying a large upfront cost for new servers or networking equipment, a business can use HPE Financial Services to spread the payments out over time. This makes it easier for companies to invest in new technology and manage their budgets.
HPE's leadership is heavily focused on the growing demand for artificial intelligence (AI) and is positioning the company to be a key provider of the powerful servers and infrastructure needed to run AI applications. They are also making a big push into what they call the 'edge-to-cloud' strategy, which helps businesses process data closer to where it's created, rather than sending it all to a central cloud. A major part of this strategy is their HPE GreenLake platform, which offers the flexibility of the cloud as a subscription service, and they aim to make their entire portfolio available this way. Finally, they are strengthening their networking business, particularly through the acquisition of Juniper Networks, to become a leader in AI-native networking.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $60.77 (588.0% higher than our fair-value estimate).
Buy below $7.07 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $8.83 a share — about 82.0% below today's price of $49.20, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Net debt $16.0B. Interest coverage 14.1x.
Hewlett Packard Enterprise Company's profit covers its interest bill about 14.1 times over. which is stronger than most peers shown here.
Total debt $21.30B Interest coverage 14.05x This is the baseline the peer rows are being compared against.
Total debt $31.16B Interest coverage 5.41x -61% vs HPE Carries about 2.6x less debt cushion than HPE.
Total debt $33.00B Interest coverage 7.85x -44% vs HPE Carries about 1.8x less debt cushion than HPE.
Total debt $2.73B Interest coverage 22.27x +58% vs HPE Carries about 1.6x more debt cushion than HPE.
Total debt $9.15B Interest coverage 21.03x +50% vs HPE Carries about 1.5x more debt cushion than HPE.
Total debt $5.16B Interest coverage 2.81x -80% vs HPE Carries about 5.0x less debt cushion than HPE.
What you should know
The numbers
Tap any ? icon to learn what it means.
Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know