US Videos

Pressures Remain on Hewlett Packard Enterprise

Mark Cash

Mark Cash: No-moat HPE reported first-quarter revenue below our expectations, but the company issued increased guidance for its 2019 earnings per share by $0.15 on a GAAP basis.

The company posted strong growth in nascent technology areas like edge computing, hyperconverged infrastructure, and all-flash array storage. As indicated by its lower revenue and margin profile expansion, the company is attempting to pivot away from lower cost sales, especially to the Tier 1 cloud service providers. 

We are maintaining our $15 per share fair value estimate for HPE as we expect its high growth areas to be offset by challenges and its core traditional markets.