Hewlett Packard Enterprise Company
Hewlett Packard Enterprise Company Fundamental Analysis
Hewlett Packard Enterprise Company (HPE) shows weak financial fundamentals with a PE ratio of 496.50, profit margin of 0.17%, and ROE of 0.23%. The company generates $34.6B in annual revenue with moderate year-over-year growth of 3.50%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 22.5/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HPE's fundamental strength across five key dimensions:
Efficiency Score
WeakHPE struggles to generate sufficient returns from assets.
Valuation Score
ModerateHPE shows balanced valuation metrics.
Growth Score
ModerateHPE shows steady but slowing expansion.
Financial Health Score
ExcellentHPE maintains a strong and stable balance sheet.
Profitability Score
ModerateHPE maintains healthy but balanced margins.
Key Financial Metrics
Is HPE Expensive or Cheap?
P/E Ratio
HPE trades at 496.50 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HPE's PEG of -4.69 indicates potential undervaluation.
Price to Book
The market values Hewlett Packard Enterprise Company at 1.15 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.54 times EBITDA. This is generally considered low.
How Well Does HPE Make Money?
Net Profit Margin
For every $100 in sales, Hewlett Packard Enterprise Company keeps $0.17 as profit after all expenses.
Operating Margin
Core operations generate 4.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $0.23 in profit for every $100 of shareholder equity.
ROA
Hewlett Packard Enterprise Company generates $0.08 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Hewlett Packard Enterprise Company generates limited operating cash flow of $2.94B, signaling weaker underlying cash strength.
Free Cash Flow
Hewlett Packard Enterprise Company produces free cash flow of $2.30B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.72 in free cash annually.
FCF Yield
HPE converts 8.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
496.50
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.69
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.15
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.83
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.91
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.01
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.002
vs 25 benchmark
ROA
Return on assets percentage
0.001
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How HPE Stacks Against Its Sector Peers
| Metric | HPE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 496.50 | 35.19 | Worse (Expensive) |
| ROE | 0.23% | 1155.00% | Weak |
| Net Margin | 0.17% | -127067.00% (disorted) | Weak |
| Debt/Equity | 0.91 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.01 | 4.71 | Neutral |
| ROA | 0.08% | -314918.00% (disorted) | Weak |
HPE outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Hewlett Packard Enterprise Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.74%
Industry Style: Growth, Innovation, High Beta
GrowingEPS CAGR
154.12%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
12.26%
Industry Style: Growth, Innovation, High Beta
High Growth