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Hewlett Packard Enterprise Co HPE

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

HPE Bounces Back to Growth in Q2 With Broad-Based Strength; 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 after its second-quarter results. Revenue growth was slightly higher than our expectations, while strong gross margins and controlled expenses led to earnings much higher than we anticipated. HPE posted broad-based strength and a bounce back to annual growth, aided by the year ago quarter being the worst impacted by the pandemic. While we expect HPE to benefit with its shift toward offering its portfolio as-a-service and believe it is well positioned in certain higher growing IT segments, core solutions potentially facing strong headwinds makes us cautious about sustained, long-term growth.

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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.

Contact
11445 Compaq Center West Drive
Houston, TX, 77070
T +1 650 687-5817
Sector Technology
Industry Communication Equipment
Most Recent Earnings Apr 30, 2021
Fiscal Year End Oct 31, 2021
Stock Type Cyclical
Employees 59,400

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