Hewlett Packard Enterprise Company HPE
HPE is mid-cycle in a powerful profitability recovery — Q3 FY2026 (ended 2026-07-31) delivered record revenue of $12.2B at 32.7% YoY growth with operating income of $1.393B, and actual EPS of $1.11 beat consensus of $0.932 by 19.1%, prompting management to raise its FY2026 outlook and update its FY2027 growth framework. Despite a post-earnings pullback on supply-constraint worries, HPE trades at 25.8x PE versus a peer median of 44.0x — a 41% discount — while smart-money accumulation has climbed to 0.0953 across 70 funds as of Q2 2026 from 0.0069 across 51 funds a year earlier.
With three consecutive quarters of strong double-digit revenue growth, a clear path back from FY2025's integration-driven profitability trough (operating margin of 4.79%, EPS of -$0.0446), and the cheapest valuation in its peer set, the risk/reward favors accumulation.
What could go wrong
- Supply constraints. Barron's reports that supply constraints aren't going away, which could cap revenue conversion even as orders outpace revenue and backlog reaches record levels.
- Margin sustainability. Investors are questioning whether margin gains hold as AI systems make up a larger share of product mix; shares fell over 5% in extended trading post-earnings despite the beat and raise.
- Elevated debt load. Total debt stood at $24.08B as of FY2025 (ended 2025-10-31), up from $19.82B in FY2024, reflecting integration-related borrowing that constrains financial flexibility.
- Profitability fragility. FY2025 demonstrated how quickly earnings can compress — operating margin collapsed to 4.79% and EPS turned negative at -$0.0446 — should integration costs or mix shift unfavorably again.
What would change my mind
Where this comes from: FMP quarterly_results, quarter ended 2026-07-31 · FMP earnings_surprises, period_end 2026-09-02 · FMP peer_relative, as of 2026-09-01 · FMP smart_money, as of 2026-06-30. Orin's read on HPE; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All HPE filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $3.9B | 0.1% of fund |
| Vanguard Portfolio Management | $3.3B | 0.1% of fund |
| State Street | $3.1B | 0.1% of fund |
| Capital World Investors | $2.7B | 0.3% of fund |
| Bank Of America /De/ | $1.8B | 0.1% of fund |
| Jpmorgan Chase & | $1.8B | 0.1% of fund |
123 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 326 Form 4 filings, net $21.2M. Of the 50 on hand, 0 were open-market purchases and 11 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about HPE
Orin answers questions about HPE from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 31.6× | — | 53.3× |
| EV/EBITDA | 17.3× | 6.0× | — |
| P/S | 2.01× | 0.70× | — |
| P/B | 3.2× | 1.0× | — |
Its P/E sits 80th percentile of its own last 5 years (−0.41σ from its own mean).
34.1%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.6B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$68
$54 – $86 · +6% against today's price
- 18 buy or overweight
- 20 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| HPEHewlett Packard Enterprise Company | $84B | 31.6× | 17.3× | 36.0% | 6.6% | 11% |
| ASXASE Technology Holding Co., Ltd. | $96B | 50.3× | 21.3× | 19.5% | 8.5% | 17% |
| CIENCiena Corporation | $51B | 77.6× | 49.9× | 44.1% | 10.9% | 23% |
| CRDOCredo Technology Group Holding Ltd | $37B | 66.4× | 63.4× | 67.1% | 33.8% | 27% |
| KEYSKeysight Technologies, Inc. | $61B | 49.2× | 35.7× | 64.7% | 19.1% | 20% |
| PSTGEverpure, Inc | $28B | 126.3× | 84.8× | 70.2% | 5.7% | 21% |
| SMCISuper Micro Computer, Inc. | $27B | 11.4× | 8.6× | 10.8% | 5.7% | 25% |
| SNDKSandisk Corporation | $260B | 22.5× | 19.5× | 71.5% | 56.5% | 93% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 37.1% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $11 | $45.80 · −77% | 2026-06-10 |
| Levered DCF | $18 | $45.80 · −61% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.