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Hewlett Packard Enterprise Co HPE

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Morningstar’s Analysis

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HPE’s Growth Ventures Continue Their Momentum As Legacy Faces Headwinds in Q3; Maintaining $14 FVE

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

We are maintaining our $14 fair value estimate for no-moat Hewlett Packard Enterprise, or HPE, after the company reported third-quarter earnings. While year-over-year revenue growth was largely in line with our expectations, HPE’s adjusted earnings came in much higher due to a strong performance from higher margin products and better operating expense management. HPE’s growth areas, including solutions for secure connectivity in a cloud-first environment and high-performance compute systems, performed very well as legacy solutions like commodity servers have not recovered out of the pandemic yet. With no large surprises coming out of the quarter, we view shares, which stayed stable after reporting, as fairly valued.

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Company Profile

Business Description

Hewlett Packard Enterprise is a supplier of IT infrastructure products and services. The company operates as three major segments. Its hybrid IT division primarily sells computer servers, storage arrays, and Pointnext technical services. The intelligent edge group sells Aruba networking products and services. HPE's financial services division offers financing and leasing plans for customers. The Palo Alto, California-based company sells on a global scale and has approximately 66,000 employees.

11445 Compaq Center West Drive
Houston, TX, 77070
T +1 650 687-5817
Sector Technology
Industry Communication Equipment
Most Recent Earnings Jul 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type High Yield
Employees 59,400