HPE
TechnologyHewlett Packard Enterprise
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XBRL · SEC EDGAR2013–2025(13yr)| Metric | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $57.4B | $55.1B | $52.1B | $50.1B | $28.9B | $30.9B | $29.1B | $27.0B | $27.8B | $28.5B | $29.1B | $30.1B | $34.3B | +13.8% |
| Gross Profit | $45.0B | $42.7B | $39.1B | $37.4B | $16.2B | $16.8B | — | — | — | — | — | — | — | — |
| Gross Margin | 78.5% | 77.5% | 75.1% | 74.6% | 56.0% | 54.4% | — | — | — | — | — | — | — | — |
| Operating Income | $3.0B | $2.3B | $1.5B | $4.2B | $625.0M | $1.9B | $1.3B | -$329.0M | $1.1B | $782.0M | $2.1B | $2.2B | -$437.0M | -120.0% |
| Operating Margin | 5.1% | 4.2% | 2.9% | 8.3% | 2.2% | 6.0% | 4.4% | -1.2% | 4.1% | 2.7% | 7.2% | 7.3% | -1.3% | -8.5pp |
| Net Income | $2.1B | $1.6B | $2.5B | $3.2B | $344.0M | $1.9B | $1.0B | -$322.0M | $3.4B | $868.0M | $2.0B | $2.6B | $57.0M | -97.8% |
| Net Margin | 3.6% | 3.0% | 4.7% | 6.3% | 1.2% | 6.2% | 3.6% | -1.2% | 12.3% | 3.0% | 7.0% | 8.6% | 0.2% | -8.4pp |
| Free Cash Flow | — | $3.3B | $317.0M | $1.7B | -$2.2B | $8.0M | $1.1B | -$143.0M | $3.4B | $1.5B | $1.6B | $2.0B | $627.0M | -68.2% |
| FCF Margin | — | 6.0% | 0.6% | 3.3% | -7.8% | 0.0% | 3.9% | -0.5% | 12.1% | 5.2% | 5.5% | 6.6% | 1.8% | -4.7pp |
| EPS (Diluted) | $1.12 | $0.90 | $1.34 | $1.82 | $0.21 | $1.23 | $0.77 | $-0.25 | $2.58 | $0.66 | $1.54 | $1.93 | $-0.04 | -102.1% |
1. THE BIG PICTURE
Hewlett Packard Enterprise is a company in the middle of a high-stakes identity shift, attempting to trade its legacy as a server manufacturer for a future in AI-driven networking and "as-a-Service" (aaS) cloud platforms. While the acquisition of Juniper Networks has successfully supercharged revenue growth, the transition is currently a drain on profitability and cash reserves. Hewlett Packard Enterprise is effectively a growth story trapped in a value-stock valuation.
2. WHERE THE RISKS HIT HARDEST
The "unified, open platform" strategy centered on HPE GreenLake is directly threatened by the "aaS transition" risk because the shift to consumption-based models delays revenue recognition (Risks). This creates a disconnect between the "strong demand" cited by management and the actual timing of cash inflows (Recent Results). Furthermore, Hewlett Packard Enterprise’s "global manufacturing footprint," cited as a competitive strength, is vulnerable to its "supply chain concentration" in China and Taiwan (Competitive Position). Any geopolitical disruption in these regions would immediately undermine Hewlett Packard Enterprise’s ability to deliver on its "multi-year innovation roadmap" for AI-native networking (10-K Item 1).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a stark divergence between top-line expansion and bottom-line health. While net revenue grew 18.4% in the most recent quarter, net earnings fell by 27.9% (10-Q). This gap is explained by the business mix shift: the Networking segment surged 151.5% due to the Juniper acquisition, but the core Cloud & AI business—which includes the ProLiant server line—saw revenue decline by 2.7% (10-Q).
This growth trajectory is currently inorganic and expensive. Among its peer group, Hewlett Packard Enterprise is the only company reporting negative free cash flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) with a margin of -1.7% (XBRL). While management points to "one of our most profitable quarters on record" (8-K), the 0.1% operating margin suggests that the costs of integration and the transition to subscription models are consuming nearly every dollar of gross profit. Market sentiment remains wary, evidenced by a short interest of 7.7% of the float, with 5.2 days required for short-sellers to cover their positions (Yahoo Finance).
4. IS IT WORTH IT AT THIS PRICE?
At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 7.8x, Hewlett Packard Enterprise is the cheapest stock in its peer group, trading at a 58% discount to the peer median of 18.6x (XBRL). This deep discount suggests the market is pricing in a period of stagnation or further margin erosion rather than the double-digit order growth management reports.
The valuation is "attractively valued" only if Hewlett Packard Enterprise can prove the Juniper acquisition provides a "full networking technology stack" that justifies its current 13.8% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth (10-K Item 1). However, the discount is currently justified by Hewlett Packard Enterprise's laggard status in efficiency; it ranks last among peers in operating margin (0.1%), net margin (1.0%), and FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (-1.7%). For the current price to be "right," Hewlett Packard Enterprise must demonstrate that its negative FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders is a temporary byproduct of the Juniper integration rather than a structural flaw in the GreenLake aaS model.
5. WHAT WOULD CHANGE THIS VIEW
- Constructive if free cash flow margin turns positive and the Cloud & AI segment returns to organic growth, proving that the ProLiant and Cray EX lines can grow alongside the new networking portfolio.
- Cautious if the integration of Juniper Networks results in "material charges" or "impairment of goodwill" (Risks), or if the dividend yield—currently at 2.6%—becomes unsustainable due to continued negative cash flow.
6. BOTTOM LINE
Structural Advantage: A co-engineered AI factory solution with Nvidia and a full-stack, AI-native networking portfolio integrated into a global manufacturing footprint.
Bottom Line: Hewlett Packard Enterprise is delivering the revenue growth of a tech leader but the margins of a distressed manufacturer; until it converts AI demand into cash flow, it will remain a value trap.
1. Top 5 Material Risks
- Go-to-Market Strategy and aaS Transition: Hewlett Packard Enterprise must successfully shift toward subscription and consumption-based models. This transition creates differences in revenue recognition timing compared to traditional capital expenditure models, making historical results less indicative of future performance and complicating financial forecasting.
- Supply Chain and Manufacturing Dependencies: Operations rely on third-party manufacturers and single-source suppliers across diverse geographies including China, Taiwan, and Thailand. Disruptions, component shortages, or the inability to pass on inflationary cost increases directly threaten gross margins and the ability to meet delivery schedules.
- Integration of Acquisitions: The integration of Juniper Networks and other business combinations requires significant management attention and capital. Failure to realize anticipated synergies or successfully combine disparate technological portfolios could lead to material charges, including the impairment of goodwill and intangible assets.
- Cybersecurity and System Integrity: Hewlett Packard Enterprise stores sensitive data for employees, customers, and partners. Cyberattacks, ransomware, or system integration failures could result in lost revenue, increased remediation expenses, and damage to Hewlett Packard Enterprise’s reputation and stock price.
- Geopolitical and Macroeconomic Volatility: With approximately 61% of net revenue derived from outside the United States, Hewlett Packard Enterprise is highly sensitive to trade restrictions, tariffs, and economic instability. These factors can constrain customer IT spending and increase the cost of doing business in international markets.
2. Company-Specific Risks
- Legacy Separation Liabilities: Ongoing indemnification obligations related to the 2015 separation from HP Inc. continue to pose risks to Hewlett Packard Enterprise’s financial condition, particularly as limited indemnity rights from the former parent increase Hewlett Packard Enterprise's exposure to potential unfavorable tax assessments.
- AI-Related Operational Risks: Hewlett Packard Enterprise’s strategic focus on AI-enabling hardware and software introduces risks regarding the development of flawed algorithms or the inability to recoup significant R&DR&DResearch & Development — spending on creating new products or technologies investments if offerings fail to meet customer needs or market expectations.
- Preferred Stock Dividend Obligations: The issuance of 30,000,000 shares of 7.625% Series C Mandatory Convertible Preferred Stock creates a senior dividend obligation that must be satisfied before any dividends can be paid to common stockholders.
- Living Progress Strategy: Publicly announced sustainability objectives expose Hewlett Packard Enterprise to reputational and legal risks if these goals are not met, or if stakeholders perceive Hewlett Packard Enterprise’s actions as inconsistent with its stated environmental and social commitments.
3. Regulatory/Legal Risks
- Government Contracting: Contracts with federal, state, and local governments are subject to strict procurement laws. Violations can result in contract termination, forfeiture of profits, treble damages, and suspension from future government work.
- Global Tax Compliance: Hewlett Packard Enterprise faces exposure to the OECD’s Pillar Two framework, which imposes a 15% global minimum corporate tax rate. Additionally, ongoing tax audits regarding intercompany transfer pricing could lead to assessments that differ materially from current provisions.
- Data Privacy and AI Regulation: Hewlett Packard Enterprise is subject to a patchwork of global privacy laws (e.g., EU regulations) and emerging AI-specific legislation. Non-compliance or the inability to adapt to these evolving frameworks could result in significant fines and restrictions on product offerings.
- Intellectual Property Litigation: Hewlett Packard Enterprise is frequently subject to third-party claims of patent infringement. Successful claims could force Hewlett Packard Enterprise to redesign products, pay substantial damages, or face permanent injunctions against selling certain offerings.
4. Financial Impact Map
aaS Revenue Recognition Shift → Revenue → Variability in timing of recognition compared to traditional hardware sales. Supply Chain Cost Increases → Gross Margin → Inability to pass on component or logistics cost increases to customers. Goodwill Impairment → Net Income → Potential material charges if acquired businesses (e.g., Hybrid Cloud) perform inconsistently with acquisition assumptions. Cybersecurity Incidents → Operating Expenses → Increased costs for remediation, insurance premiums, and potential regulatory fines. Preferred Stock Dividends → Retained Earnings/Cash Flow → Mandatory 7.625% dividend payment on $50 liquidation preference per share.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-Q | Mar 2026 | Jan 2026 |
| 8-K | Mar 2026 | — |
| 14A | Feb 2026 | — |
| 10-K | Dec 2025 | Oct 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
HPE Q1 Revenue $9.3B +18% YoY, Non-GAAP EPS $0.65 Beats Guidance
- ▸Q1 revenue $9.3B, up 18% year-over-year
- ▸Non-GAAP EPS $0.65, exceeded guidance range
- ▸GAAP gross margins 35.9%, non-GAAP margins 36.6%
- ▸Operating cash flow $1.2B; free cash flow $0.7B
- ▸Returned $348M to shareholders via dividends and buybacks
HPE Launches New AI Governance, Security, and Post-Quantum Cryptography Infrastructure Tools
- ▸Introduced AI governance, machine unlearning, and confidential computing infrastructure tools
- ▸Launched national AI Experience Center for scalable, privacy-focused public sector deployments
- ▸Stock trading at $22.61, approximately 13% below analyst price target of $26.01
- ▸Company maintains 128x trailing P/E and 20x forward P/E ratios
- ▸High debt levels and dividend coverage remain key financial risks for investors
HPE shares jump 10% on new AI-focused security product launch and $2B debt offering
- ▸Shares rose 10% following new security product announcements
- ▸Launched Juniper Networking SRX400 Series Firewalls for cloud and edge environments
- ▸Completed $2 billion debt offering to fund strategic AI initiatives
- ▸Company strategy centers on high-performance networking and 'AI Factory' vision
- ▸Stock trading at $25.90, near 52-week high of $26.25
HPE Shares Rise 7.77% Ahead of Dividend Record Date; Q1 Revenue +18.5% to $9.3B
- ▸Q1 revenue $9.3B, up 18.5% YoY
- ▸Q1 net income $423M, down 29% YoY
- ▸Quarterly dividend $0.1425 per share payable April 23
- ▸Q2 revenue guidance $9.6B–$10B, representing 26%–31.6% growth
- ▸FY26 revenue growth target 17%–22% with networking segment up 68%–73%
HPE Q1 EPS $0.65 beats estimates, raises FY26 EPS guidance to $2.30–$2.50
- ▸Q1 non-GAAP EPS $0.65, slightly above market expectations
- ▸Raised FY26 non-GAAP EPS guidance by $0.05 to $2.30–$2.50 range
- ▸Lowered Cloud and AI guidance citing higher memory prices and supply issues
- ▸Bernstein SocGen reiterates Market Perform rating with $24 price target
- ▸UBS reiterates Neutral rating with $25 price target
HPE to Build $64.8M HammerHAI AI Factory for EU Sovereign AI Initiatives
- ▸HPE to build HammerHAI supercomputer for EU AI Factory in Germany
- ▸Project valued at €55 million ($64.8 million)
- ▸HammerHAI system delivers over 15 exaflops of peak AI inference performance
- ▸Systems at Argonne National Laboratory to advance U.S. AI training and inference
- ▸Infrastructure utilizes NVIDIA GB200 NVL4 by HPE rack-scale architecture
HPE raises FY26 revenue guidance to $41.2B and EPS to $2.49
- ▸Raised FY2026 revenue projection to $41.2 billion
- ▸Raised FY2026 EPS projection to $2.49 per share
- ▸Morgan Stanley increased price target from $23 to $25
- ▸Bank of America increased price target from $29 to $32
- ▸Demand remains robust despite ongoing component cost pressures
HPE Q1 Revenue $9.3B +18%, EPS $0.65 beats guidance, raises FY26 outlook
- ▸Q1 revenue $9.3B, +18% YoY; non-GAAP EPS $0.65 beats high-end guidance
- ▸Raised FY26 EPS guidance to $2.30–$2.50 and FCF to at least $2B
- ▸Networking segment revenue $2.7B, +152% reported; operating margin 23.7%
- ▸AI Systems backlog reached record $5B; cumulative AI networking order target raised
- ▸GreenLake platform reaches nearly 50,000 customers, tracking toward $3.5B ARR
HPE Q1 Revenue $9.3B +18.4% YoY, EMEA Revenue Beats Estimates by 14%
- ▸Total revenue $9.3B, +18.4% YoY
- ▸EMEA revenue $3.49B, 37.5% of total, beat estimates by 14.18%
- ▸Asia Pacific and Japan revenue $1.99B, 21.4% of total, beat estimates by 3.31%
- ▸Current quarter revenue guidance $9.8B, +28.4% YoY
- ▸Projected EMEA revenue $3.15B and APAC/Japan revenue $1.99B for next quarter
HPE Q1 Revenue $8.43B, Raises FY26 GAAP EPS Guidance to $1.02–$1.22
- ▸Q1 revenue $8.43B, net income $452M
- ▸Raised FY26 GAAP diluted EPS guidance to $1.02–$1.22
- ▸Reaffirmed FY26 revenue growth outlook of 17% to 22%
- ▸Confirmed quarterly dividend of $0.1425 per share
- ▸Cumulative share buybacks total $12.86B since 2015