Download PDF

1. Company Snapshot

1.a. Company Description

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data seamlessly in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan.The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE BladeSystem and HPE Synergy; and solutions for secondary workloads and traditional tape, storage networking, and disk products, such as HPE Modular Storage Arrays and HPE XP.It also offers HPE Apollo and Cray products; and HPE Superdome Flex, HPE Nonstop, HPE Integrity, and HPE Edgeline products.


In addition, the company provides HPE Aruba product portfolio that includes wired and wireless local area network hardware products, such as Wi-Fi access points, switches, routers, and sensors; HPE Aruba software and services comprising cloud-based management, network management, network access control, analytics and assurance, and location; and professional and support services, as well as as-a-service and consumption models for the intelligent edge portfolio of products.Further, it offers various leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others.Additionally, the company invests in communications and media solutions.


It has a partnership with Striim, Inc.to offer high performance and mission-critical solutions with real-time analytics.It serves commercial and large enterprise groups, such as 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 Houston, Texas.

Show Full description

1.b. Last Insights on HPE

Breaking News: Hewlett Packard Enterprise Company recently reported its earnings, with Caisse Des Depots ET Consignations acquiring 27,866 shares, lifting its holdings by 33.1% to 112,052 shares. The company's recent earnings release showed mixed results. Analysts at Zacks Investment Research upgraded their rating to a hold from a sell. Meanwhile, analysts at Deutsche Bank raised their price target on the stock. Other analysts at Morgan Stanley maintained their equal-weight rating on Hewlett Packard Enterprise Company. Hewlett Packard Enterprise Company recent quarterly earnings release reported revenue 7.4 billion .

1.c. Company Highlights

2. HPE's Q4 Earnings: A Record-Breaking Performance

Hewlett Packard Enterprise (HPE) closed a transformative fiscal year 2025 with a record fourth quarter, reporting revenue of $9.7 billion, a 14% year-over-year increase. The non-GAAP operating margin hit a record 12.2%, and non-GAAP diluted net earnings per share was $0.62, exceeding guidance. The company's strong financial performance was driven by a 51% increase in networking revenue, largely due to the Juniper Networks acquisition. For the full year, HPE reported $34.3 billion in revenue, up 14% year-over-year, with non-GAAP diluted net earnings per share of $1.94.

Publication Date: Dec -07

📋 Highlights
  • Q4 Revenue Growth:: HPE reported $9.7 billion in Q4 revenue, a 14% year-over-year increase, with non-GAAP operating profits rising 26% and a record non-GAAP operating margin of 12.2%.
  • Annual Revenue Expansion:: Full-year revenue reached $34.3 billion, up 14% YoY, driven by the Juniper acquisition, which boosted networking revenue by 51%.
  • ARR Surge:: Annual Recurring Revenue (ARR) grew 62% YoY to $3.2 billion, with 80% from software and services, including Juniper’s Mist and Apstra subscriptions.
  • Free Cash Flow & Guidance:: HPE generated $1.9 billion in Q4 free cash flow (capping $986 million for the year) and raised FY2026 EPS guidance to $2.25–$2.45 and cash flow guidance midpoints.
  • Strategic Asset Sale:: The $1.4 billion sale of HPE’s remaining stake in H3C (expected in 2026) supports reducing net leverage to ~2x by FY2027, aligning with long-term targets of $3 EPS and $3.5 billion free cash flow by FY2028.

Segment Performance

The networking segment was a significant contributor to HPE's revenue growth, with Q4 revenue reaching $2.8 billion, up 150% year-over-year and 62% sequentially. The server business generated revenue of $4.5 billion, down 5% year-over-year, while Hybrid Cloud revenue was $1.4 billion, down 13% year-over-year. Financial Services revenue was $889 million, roughly flat sequentially and down 2% year-over-year. The addition of Juniper's software subscription services drove the increase in Annual Recurring Revenue (ARR) to $3.2 billion.

Guidance and Outlook

HPE expects revenue growth of 17-22% on a reported basis and 5-10% on a pro forma basis for FY 2026, with a non-GAAP diluted net EPS range of $2.25-$2.45. The company is raising its full-year networking revenue growth outlook to 65-70% on a reported basis. Management expressed confidence in HPE's strategy and its ability to drive transformation and growth in 2026. Analysts estimate next year's revenue growth at 17.5%. With a P/E Ratio of 1109.84 and an EV/EBITDA of 26.83, the market is pricing in high expectations for HPE's future growth.

Valuation and Profitability

The company's actual EPS of $0.62 beat estimates of $0.579. HPE's ROE is 0.11%, and ROIC is -0.16%, indicating room for improvement in profitability. With a Net Debt / EBITDA ratio of 9.4, HPE's leverage is relatively high. However, the sale of its remaining 19% stake in H3C for approximately $1.4 billion is expected to support its plan to reduce net leverage to around two times by the end of fiscal year 2027.

Key Drivers and Challenges

The integration of Juniper and HPE has led to cross-pollination opportunities, such as combining Mist and Aruba Central, which will add more software to the subscription model. However, HPE faces challenges related to demand elasticity and commodity prices, particularly with server DRAM costs rising 50% in April. The company has made pricing changes to reflect these increased costs and expects a rebalancing between units and revenue over time.

3. NewsRoom

Card image cap

Barrow, Hanley, Mewhinney & Strauss Makes Significant Move with GE HealthCare Technologies Inc

Feb -12

Source: gurufocus.com

Card image cap

Caisse Des Depots ET Consignations Acquires 27,866 Shares of Hewlett Packard Enterprise Company $HPE

Feb -12

Source: defenseworld.net

Card image cap

Hewlett Packard Enterprise Company $HPE Shares Sold by Alps Advisors Inc.

Feb -11

Source: defenseworld.net

Card image cap

Advisors Asset Management Inc. Increases Position in Hewlett Packard Enterprise Company $HPE

Feb -11

Source: defenseworld.net

Card image cap

JEDEC Board Presents 2026 Distinguished Executive Leadership Award to HPE President and CEO Antonio Neri

Feb -10

Source: businesswire.com

Card image cap

New Research Finds Only 5% of Enterprises are Fully Ready for The Great Virtualization Reset

Feb -10

Source: businesswire.com

Card image cap

Hewlett Packard Enterprise Company (NYSE:HPE) Receives Consensus Recommendation of “Hold” from Brokerages

Feb -09

Source: defenseworld.net

Card image cap

HPE to Present Live Audio Webcast of Fiscal 2026 First Quarter Earnings Conference Call

Feb -03

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Server

Expected Growth: 4.5%

Hewlett Packard Enterprise's server growth of 4.5% is driven by increasing demand for edge computing, hybrid cloud adoption, and refreshed product portfolio. The company's strategic focus on high-growth areas like AI, machine learning, and data analytics also contributes to this growth, as customers seek to modernize their infrastructure and improve operational efficiency.

Hybrid Cloud

Expected Growth: 7.0%

Hewlett Packard Enterprise's Hybrid Cloud growth of 7.0% is driven by increasing demand for flexible and scalable infrastructure, strategic partnerships, and investments in cloud-native technologies. Customers are seeking seamless integration between on-premises and public clouds, and HPE's hybrid cloud offerings are well-positioned to capitalize on this trend, driving growth through increased adoption and expanded customer relationships.

Intelligent Edge

Expected Growth: 6.5%

The Intelligent Edge segment growth of 6.5% is driven by increasing demand for edge computing, IoT, and 5G solutions. Hewlett Packard Enterprise's strong portfolio of edge-focused products and services, including Aruba, HPE Ezmeral, and HPE GreenLake, positions it well to capitalize on these trends, driving growth through expanded customer adoption and innovation.

Financial Services

Expected Growth: 2.5%

Hewlett Packard Enterprise's Financial Services segment growth of 2.5% is driven by increasing demand for hybrid IT and financial sector digital transformation. Key drivers include rising adoption of cloud, AI, and data analytics solutions, as well as strategic partnerships and investments in emerging technologies, enabling clients to modernize infrastructure and improve operational efficiency.

Corporate Investments and Other

Expected Growth: 1.8%

The 1.8 growth in Corporate Investments and Other at Hewlett Packard Enterprise Company is driven by strategic acquisitions, increased venture capital investments, and growth in emerging technologies such as AI and cloud computing, which are aligned with the company's hybrid cloud and edge computing strategy.

Eliminations of Intersegment Net Revenue

Expected Growth: 0.0%

The elimination of intersegment net revenue for Hewlett Packard Enterprise Company with 0.0% growth indicates that inter-segment transactions are being netted out, suggesting no incremental revenue growth from these transactions. This could be due to stable segment performance, efficient internal supply chain management, or unchanged business structure.

7. Detailed Products

HPE Servers

HPE offers a range of servers, including ProLiant, Synergy, and Mission-Critical Solutions, designed to provide high performance, reliability, and scalability for various workloads

HPE Storage Solutions

HPE storage solutions include 3PAR Storage, Nimble Storage, and HPE Storage for Data Center, providing efficient data management, high performance, and scalability for storage needs

HPE Networking

HPE networking products include Aruba switching, routing, and wireless solutions, designed to provide secure, reliable, and high-performance connectivity for various network environments

HPE Cloud Services

HPE Cloud Services offer a range of cloud solutions, including HPE GreenLake, HPE Cloud Object Storage, and HPE Cloud Backup, providing flexible, scalable, and secure cloud infrastructure and services

HPE Cybersecurity Solutions

HPE cybersecurity solutions include HPE Security ArcSight, HPE Security Fortify, and HPE Security Services, designed to provide threat detection, incident response, and security consulting services

HPE Data Analytics

HPE data analytics solutions include HPE Ezmeral, HPE InfoSight, and HPE Data Flow, providing data management, analytics, and visualization capabilities for various data sources

HPE Pointnext Services

HPE Pointnext Services offer a range of IT services, including consulting, implementation, and support services, designed to help customers achieve their digital transformation goals

8. Hewlett Packard Enterprise Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Hewlett Packard Enterprise Company (HPE) operates in the technology industry, where substitutes are available but not necessarily perfect. For instance, in the server market, customers can choose between HPE's servers and those from competitors like Dell, Lenovo, or IBM. However, switching costs and compatibility issues might limit the threat. The score of 3 reflects a moderate threat level.

Bargaining Power Of Customers

HPE's customers, primarily large enterprises and organizations, have significant bargaining power due to their substantial purchasing volumes. These customers can negotiate prices, demand customized solutions, and have multiple suppliers to choose from, which puts pressure on HPE to meet their needs. The score of 4 reflects a high bargaining power of customers.

Bargaining Power Of Suppliers

HPE has a diverse and global supply chain with numerous suppliers. While some suppliers might have a degree of bargaining power, HPE's scale and market position allow it to negotiate favorable terms. Additionally, HPE can switch suppliers if needed, reducing the bargaining power of individual suppliers. The score of 2 reflects a low bargaining power of suppliers.

Threat Of New Entrants

The technology industry, particularly the enterprise hardware and services segment, has high barriers to entry. New entrants face significant challenges, including high R&D costs, established brand loyalty, and the need for extensive distribution networks. The score of 2 reflects a low threat of new entrants.

Intensity Of Rivalry

The technology industry is highly competitive, with numerous established players competing for market share. HPE competes directly with major companies like Cisco, Dell, and IBM, among others. The competition is intense, with companies vying for market share through innovation, pricing strategies, and acquisitions. The score of 5 reflects a very high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.37%
Debt Cost 4.28%
Equity Weight 57.63%
Equity Cost 10.60%
WACC 7.92%
Leverage 73.53%

11. Quality Control: Hewlett Packard Enterprise Company passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Cisco

A-Score: 6.2/10

Value: 2.3

Growth: 4.0

Quality: 7.6

Yield: 5.0

Momentum: 9.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
IBM

A-Score: 5.7/10

Value: 1.8

Growth: 3.0

Quality: 6.0

Yield: 6.0

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
NetApp

A-Score: 5.5/10

Value: 3.4

Growth: 5.7

Quality: 7.4

Yield: 5.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
QUALCOMM

A-Score: 5.5/10

Value: 2.5

Growth: 5.9

Quality: 7.4

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Motorola Solutions

A-Score: 5.0/10

Value: 2.0

Growth: 6.3

Quality: 6.8

Yield: 2.0

Momentum: 3.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
HPE

A-Score: 4.6/10

Value: 4.4

Growth: 3.7

Quality: 3.2

Yield: 5.0

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.22$

Current Price

22.22$

Potential

-0.00%

Expected Cash-Flows