Pressures Remain on Hewlett Packard Enterprise
Results were below expectations, but the no-moat firm increased its EPS guidance for 2019.
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.
Mark Cash does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.