Hewlett Packard Enterprise Co

HPE

Wholesale-Computers & Peripheral Equipment & Software

Mkt Cap

$23.93B

PE

12.52

Debt

$17.75B

Cash

$3.972B

EV

$37.72B

FCF

$2.631B

Market Cap

$23.93B

P/E Ratio

12.52

Debt

$17.75B

Cash

$3.972B

EV

$37.72B

FCF

$2.631B

Charts data: {"Earnings":[{"time":"2014-10-30","value":1648000000},{"time":"2015-10-30","value":2461000000},{"time":"2016-10-30","value":3161000000},{"time":"2017-10-30","value":344000000},{"time":"2018-10-30","value":1908000000},{"time":"2019-10-30","value":1049000000},{"time":"2020-10-30","value":-322000000},{"time":"2021-10-30","value":3427000000},{"time":"2022-10-30","value":868000000},{"time":"2023-10-30","value":2025000000}],"Sales":[{"time":"2014-10-30","value":55123000000},{"time":"2015-10-30","value":52107000000},{"time":"2016-10-30","value":50123000000},{"time":"2017-10-30","value":28871000000},{"time":"2018-10-30","value":30852000000},{"time":"2019-10-30","value":29135000000},{"time":"2020-10-30","value":26982000000},{"time":"2021-10-30","value":27784000000},{"time":"2022-10-30","value":28496000000},{"time":"2023-10-30","value":29135000000}],"Net Margins":[{"time":"2014-10-30","value":0.029896776300273934},{"time":"2015-10-30","value":0.04722973880668624},{"time":"2016-10-30","value":0.06306486044330946},{"time":"2017-10-30","value":0.011915070485954764},{"time":"2018-10-30","value":0.061843640606767794},{"time":"2019-10-30","value":0.036004805217092845},{"time":"2020-10-30","value":-0.011933881847157364},{"time":"2021-10-30","value":0.12334437086092716},{"time":"2022-10-30","value":0.030460415496911846},{"time":"2023-10-30","value":0.06950403295006007}],"Assets":[{"time":"2014-10-30","value":65071000000},{"time":"2015-10-30","value":81270000000},{"time":"2016-10-30","value":79679000000},{"time":"2017-10-30","value":61406000000},{"time":"2018-10-30","value":55493000000},{"time":"2019-10-30","value":51803000000},{"time":"2020-10-30","value":54015000000},{"time":"2021-10-30","value":57699000000},{"time":"2022-10-30","value":57123000000},{"time":"2023-10-30","value":57153000000}],"Stockholders Equity":[{"time":"2014-10-30","value":37172000000},{"time":"2015-10-30","value":33918000000},{"time":"2016-10-30","value":31518000000},{"time":"2017-10-30","value":23505000000},{"time":"2018-10-30","value":21274000000},{"time":"2019-10-30","value":17149000000},{"time":"2020-10-30","value":16096000000},{"time":"2021-10-30","value":20017000000},{"time":"2022-10-30","value":19909000000},{"time":"2023-10-30","value":21238000000}],"ROE":[{"time":"2014-10-30","value":0.044334445281394595},{"time":"2015-10-30","value":0.07255734418302966},{"time":"2016-10-30","value":0.10029189669395266},{"time":"2017-10-30","value":0.014635184003403532},{"time":"2018-10-30","value":0.08968694180690044},{"time":"2019-10-30","value":0.061169747507143275},{"time":"2020-10-30","value":-0.02000497017892644},{"time":"2021-10-30","value":0.17120447619523405},{"time":"2022-10-30","value":0.04359837259530865},{"time":"2023-10-30","value":0.09534796120161974}],"ROA":[{"time":"2014-10-30","value":0.035883880684175744},{"time":"2015-10-30","value":0.018740002460932693},{"time":"2016-10-30","value":0.05208398699782879},{"time":"2017-10-30","value":0.01017815848614142},{"time":"2018-10-30","value":0.03348170039464437},{"time":"2019-10-30","value":0.029978958747562883},{"time":"2020-10-30","value":-0.006090900675738221},{"time":"2021-10-30","value":0.06216745524185861},{"time":"2022-10-30","value":0.015335329026836826},{"time":"2023-10-30","value":0.039018074291813205}]}

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. It operates in six segments: Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, and Corporate Investments and Other. The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; 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 Cray, HPE Apollo, and converged edge systems; and HPE Superdome Flex, HPE Nonstop, and HPE Integrity products. In addition, the company provides HPE Aruba product portfolio that includes hardware products, such as Wi-Fi access points, switches, and gateways; 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 provides consultative-led services; HPE Ezmeral Container Platform; HPE Ezmeral Data Fabric; and Hewlett Packard Labs. 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. The company was founded in 1939 and is headquartered in Spring, Texas.

Sector

10-Q
7/31/23
10-Q
4/30/23
10-Q
1/31/23
10-K
10/31/22
10-Q
7/31/22
10-Q
4/30/22
10-Q
1/31/22
10-K
10/31/21
10-Q
7/31/21
10-Q
4/30/21
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1/31/21
10-K
10/31/20
10-Q
7/31/20
10-Q
4/30/20
10-Q
1/31/20
10-K
10/31/19
10-Q
7/31/19
10-Q
4/30/19
10-Q
1/31/19
10-K
10/31/18
10-Q
7/31/18
10-Q
4/30/18
10-Q
1/31/18

DCF

Discounted Cash Flow Valuation of Hewlett Packard Enterprise Co

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$2.631B	$3.42B	$4.351B	$5.415B	$6.588B	$7.833B	$9.095B	$10.31B	$11.4B	$12.28B	$12.9B	$129B
DCF		$2.974B	$3.29B	$3.56B	$3.767B	$3.894B	$3.932B	$3.875B	$3.725B	$3.491B	$3.188B	$31.88B
Value	$67.57B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -3.8%

Earnings Stability -16%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	10-2015	10-2016	10-2017	10-2018	10-2019	10-2020	10-2021	10-2022	10-2023	TTM
Net Margin	4.7%	6.3%	1.2%	6.2%	3.6%	-1.2%	12%	3%	7%	6.8%
ROA	1.9%	5.2%	1%	3.3%	3%	-0.61%	6.2%	1.5%	3.9%	3.6%
ROE	7.3%	10%	1.5%	9%	6.1%	-2%	17%	4.4%	9.5%	8.9%

What is the average Net Margin?

The average Net Margin over the past 5 years is +5.15%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.45%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +2.9%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.15%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +7.35%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +0.48%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	10-2015	10-2016	10-2017	10-2018	10-2019	10-2020	10-2021	10-2022	10-2023	TTM
Debt FCF	49.82	9.62	-6.24	1517.63	12.11	-129.73	4.75	11.25	10.35	6.75
Debt Equity	0.47	0.51	0.60	0.57	0.81	1.15	0.80	0.83	0.78	0.83
MIN
Graham Stability	-	-	14%	96%	58%	-29%	100%	63%	100%	-29%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.75.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -211.56.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.29.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	10-2016	10-2018	10-2020	10-2022	Trend
Revenue	-7.5%	-1.1%	2.6%	2.2%	2.1%
Net Income	-6.2%	1.2%	-	130%	-1%
Stockholders Equity	-5.5%	-0.034%	9.7%	6.7%	3.1%
FCF	-0.68%	190%	-	8.8%	-21%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -1.14%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.11%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +1.2%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.01%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -0.03%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +3.07%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +188.54%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -21.21%.