Hewlett Packard Enterprise Company Fundamental Analysis
Hewlett Packard Enterprise Company (HPE) shows weak financial fundamentals with a PE ratio of 48.63, profit margin of 3.90%, and ROE of 6.12%. The company generates $38.6B in annual revenue with strong year-over-year growth of 14.06%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 46.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D 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
WeakHPE struggles to sustain strong margins.
Key Financial Metrics
Is HPE Expensive or Cheap?
P/E Ratio
HPE trades at 48.63 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HPE's PEG of -1.28 indicates potential undervaluation.
Price to Book
The market values Hewlett Packard Enterprise Company at 2.92 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 18.26 times EBITDA. This signals the market has high growth expectations.
How Well Does HPE Make Money?
Net Profit Margin
For every $100 in sales, Hewlett Packard Enterprise Company keeps $3.90 as profit after all expenses.
Operating Margin
Core operations generate 6.60 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.12 in profit for every $100 of shareholder equity.
ROA
Hewlett Packard Enterprise Company generates $1.91 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Hewlett Packard Enterprise Company produces operating cash flow of $6.31B, showing steady but balanced cash generation.
Free Cash Flow
Hewlett Packard Enterprise Company generates strong free cash flow of $5.59B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.22 in free cash annually.
FCF Yield
HPE converts 7.72% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
48.63
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.28
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.92
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.88
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.84
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.09
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How HPE Stacks Against Its Sector Peers
| Metric | HPE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 48.63 | 37.77 | Worse (Expensive) |
| ROE | 6.12% | 978.00% | Weak |
| Net Margin | 3.90% | 5981737212.00% | Weak |
| Debt/Equity | 0.84 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.09 | 116.36 | Neutral |
| ROA | 1.91% | -299013.00% (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
24.40%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
117.30%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
27.36%
Industry Style: Growth, Innovation, High Beta
High Growth