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Pressures Remain on Hewlett Packard Enterprise

Mark Cash Feb 22, 2019

Pressures Remain on Hewlett Packard Enterprise

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.

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About the Author

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Mark Cash

Senior Equity Analyst

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Mark Cash is a senior equity analyst on the technology team for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers networking and cybersecurity stocks.

Before joining Morningstar in 2018, Cash spent eight years at a leading LED technology company as a product manager with profit-and-loss responsibility after various product development roles.

Cash holds a bachelor’s degree in electrical engineering from Northeastern University’s College of Engineering. He also holds a Master of Business Administration, with a finance concentration, from the University of North Carolina’s Kenan-Flagler Business School.

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