Hewlett Packard Enterprise (HPE)
Technology · NYSE · US
Fundamentals
Valuation and ratings
Hewlett Packard Enterprise trades at $47.39, close to the $41.20 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 49 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 45.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Hewlett Packard Enterprise
Hewlett Packard Enterprise Company, together with its subsidiaries, develops intelligent solutions in the United States, the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and internationally. It operates in five segments: Server, Hybrid Cloud, Networking, Financial Services, and Corporate Investments and Other. The company offers general-purpose servers, workload-optimized servers, and integrated systems, including HPE ProLiant Rack and Tower servers; HPE Synergy; HPE Scale Up servers; HPE Edgeline servers; HPE Cray EX; HPE Cray XD; and HPE NonStop. It also provides cloud-native and hybrid solutions, such as HPE Alletra Storage; HPE InfoSight; HPE CloudPhysics; and HPE GreenLake. In addition, the company develops and sells networking and security products and services comprising hardware products, which include Wi-Fi and private cellular access points, MX and PTX routers, and gateways, as well as QFX, EX, and CX switches; software products, such as Mist and Aruba Central; and services comprising professional, maintenance, support services, management software, and education and training programs. Further, it offers investment solutions, including leasing, financing, IT consumption, utility programs, and asset management services, as well as supports financial solutions for on-premise flexible consumption models. The company serves commercial and large enterprise groups, as well as business and public sector enterprises. It sells its products through resellers, distribution partners, master area partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. The company was founded in 1939 and is headquartered in Spring, Texas.
HPE passes 2 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Paul Singer, Elliott Investment Management L.P.$652.91M · 3.3% of book
- David Greenspan, Slate Path Capital LP$553.70M · 8.2% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$327.23M · 0.1% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$252.28M · 0.2% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$103.97M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Hewlett Packard Enterprise (HPE) undervalued?
Against our discounted cash flow estimate of $41.20, HPE at $47.39 is 13% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own HPE?
5 of the institutions we track reported a position in HPE in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is HPE's P/E ratio?
HPE trades at 45.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for HPE, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.