# Hewlett Packard Enterprise (HPE.US)

Canonical: https://gigainvestors.com/s/HPE

Analysis as of: 2026-10-16T07:29:06.575Z. Financial observations: FY2012–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $58.63 per share; close as of 2026-10-15.

Estimated value: low $28.05 per share, central $31.36 per share, high $35.76 per share. Buy at or below the central value $31.36 per share. Valuation as of 2026-10-16T07:29:06.575Z; scenarios are not confidence intervals.

Expected annual return: 6.4% at the stated quote. About 6.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 1

- Operating margin variation: 0.15×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.08×

- FY2017: 0.07×

- FY2018: 0.08×

- FY2019: 0.08×

- FY2020: 0.06×

- FY2021: 0.08×

- FY2022: 0.07×

- FY2023: 0.08×

- FY2024: 0.08×

- FY2025: 0.05×

### moat: pass

- ROIC, median of available years: 17.1%

- ROIC, second-lowest year: 11.5%

- Typical minus recent gross margin: 2.5 pp

- Typical gross margin (annual median): 31.3%

- Recent gross margin (lower of latest and 3-year median): 28.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 9.6%

- ROIC including acquisitions, ten-year median: 4.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 11.5%

- FY2017: 19.4%

- FY2018: 21.6%

- FY2019: 17.1%

- FY2020: 11.8%

- FY2021: 17.1%

- FY2022: 15.5%

- FY2023: 17.6%

- FY2024: 18.2%

- FY2025: 6.8%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.02×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $9.1B

- Net income, five-year total: $9.0B

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: 0.2 pp

- Working capital / revenue, change between three-year averages: 0.6 pp

- Working capital / revenue, final three-year average: 17.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.03×

- FY2022: 0.32×

- FY2023: 1.00×

- FY2024: 1.08×

- FY2025: 8.81×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2025 (8 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 19.4% vs 17.6%

- Per-share earnings: 1.34 to 1.54 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -3.2%

- Ordinary dilution, 5-year annual growth: 0.5%

- Market cap gain: $10.0B

- Cumulative retained earnings: $4.4B

- Diluted shares, 10-year annual growth: -3.2%

- Diluted shares, 5-year annual growth: 0.5%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 1.7%

- Per-share value change: $0.20

- Per-share value, starting three-year median: $1.34

- Per-share value, ending three-year median: $1.54

- Buybacks concentrated in cheaper years (correlation): -0.27

- Average buyback yield: 5.4%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $15B

- Cumulative net income, 10 years: $15B

- ROIC, first three-year median: 19.4%

- ROIC, last three-year median: 17.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.82

- FY2017: $0.21

- FY2018: $1.23

- FY2019: $0.77

- FY2020: -$0.25

- FY2021: $2.58

- FY2022: $0.66

- FY2023: $1.54

- FY2024: $1.93

- FY2025: $0.04

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -3.8%

- Receivables to sales index (DSRI): 1.08×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 22.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 51.21×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.22×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.3%

- FY2017: -0.9%

- FY2018: -1.9%

- FY2019: -5.7%

- FY2020: -4.7%

- FY2021: -4.2%

- FY2022: -6.5%

- FY2023: -4.2%

- FY2024: -2.5%

- FY2025: -3.8%

## Holders

- [John Rogers](https://gigainvestors.com/AI): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 9.6% a year for ten years · "HPE Boosts Forecast on Positive Networking Outlook" (finance.yahoo.com, Sep 2026) · sales +14.1%

Story as of 2026-10-16T09:58:53.838Z; price observation 2026-10-15.

Price needs cash profits to grow 9.6% a year for ten years

- 2025-06-03: Hewlett Packard beats Q2 results estimates on AI demand; records $1.36 billion charge ([finance.yahoo.com](https://finance.yahoo.com/news/hewlett-packard-enterprise-beats-quarterly-201651304.html))

- 2025-11-18: Dell, HPE Shares Fall After Morgan Stanley Warned Surging Memory Prices Could Hit Margins ([finance.yahoo.com](https://finance.yahoo.com/news/dell-hpe-shares-fall-morgan-112629741.html))

- 2026-03-10: Hewlett Packard Enterprise Raises Fiscal 2026 Earnings Outlook Following First-Quarter Profit Beat ([finance.yahoo.com](https://finance.yahoo.com/news/hewlett-packard-enterprise-raises-fiscal-102709309.html))

- 2026-04-26: Hewlett Packard Enterprise Rides Generative AI Server Growth And Valuation Debate ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/hewlett-packard-enterprise-rides-generative-030708804.html))

- 2026-05-19: Why Hewlett Packard Enterprise (HPE) Is Up 6.9% After Reshaping Its Global Distribution Model ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/why-hewlett-packard-enterprise-hpe-161142041.html))

- 2026-09-30: HPE rises as it wins $1.2B AMD Helios order from Vultr, boosts 2027 outlook ([seekingalpha.com](https://seekingalpha.com/news/4648443-hpe-rises-as-it-wins-12b-amd-helios-order-from-vultr-boosts-2027-outlook?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

### Sales · FY2024–2025

sales +14.1%; source https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm; observed 2025-12-18.

- FY2016: $30B 

- FY2017: $29B 

- FY2018: $31B 

- FY2019: $29B 

- FY2020: $27B 

- FY2021: $28B 

- FY2022: $28B 

- FY2023: $29B 

- FY2024: $30B 

- FY2025: $34B 

### Gross margin · FY2025

gross margin 28.8%; source https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm; observed 2025-12-18.

- FY2016: 31.5% 

- FY2017: 29.2% 

- FY2018: 29.0% 

- FY2019: 31.1% 

- FY2020: 29.9% 

- FY2021: 32.7% 

- FY2022: 31.4% 

- FY2023: 34.1% 

- FY2024: 31.8% 

- FY2025: 28.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in communication equipment; annual sales are USD 34.3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm (filed 2025-12-18); FY2025: revenue 34296000000; grossProfit 9866000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); HPE.US: Hewlett Packard Enterprise Company, together with its subsidiaries, develops intelligent solutions in the United States, the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and internationally. It operates in five segments: Server, Hybrid Cloud, Networking, Financial Services, and Corporate Investments and Other. The company offers general-purpose servers, workload-optimized servers, and integrated systems, including HPE ProLiant Rack and Tower servers; HPE Synergy; HPE Scale Up servers; HPE Edgeline servers; HPE Cray EX; HPE Cray XD; and HPE NonStop. It also provides cloud-native and hybrid solutions, such as HPE Alletra Storage; HPE InfoSight; HPE CloudPhysics; and HPE GreenLake. In addition, the company develops and sells networking and security products and services comprising hardware products, which include Wi-Fi and private cellular access points, MX and PTX routers, and gateways, as well as QFX, EX, and CX switches; software products, such as Mist and Aruba Central; and services comprising professional, maintenance, support services, management software, and education and training programs. Further, it offers investment solutions, including leasing, financing, IT consumption, utility programs, and asset management services, as well as supports financial solutions for on-premise flexible consumption models. The company serves commercial and large enterprise groups, as well as business and public sector enterprises. It sells its products through resellers, distribution partners, master area partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. The company was founded in 1939 and is headquartered in Spring, Texas.

### Why customers stay

Margins ranged from 28.8% to 34.1% during 2023–25; it earns 17.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2023: grossProfit / revenue = 34.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2024: grossProfit / revenue = 31.8%.

- Source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm (filed 2025-12-18); FY2025: grossProfit / revenue = 28.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); 10-year return on capital observations [[2016,0.11514831849536752],[2017,0.1935018744592906],[2018,0.21645534981300737],[2019,0.17109691673086552],[2020,0.11761448553362713],[2021,0.1712330271696631],[2022,0.15466011538381044],[2023,0.17622680294185397],[2024,0.18176112370152328],[2025,0.06756633024659245]]; median 0.1711649719502643. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 202 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2016: growth capex 0; upkeep 3280000000; owner earnings 3656000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2017: growth capex 0; upkeep 3137000000; owner earnings 258000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2018: growth capex 376131519.6417422; upkeep 2579868480.358258; owner earnings 1904131519.6417422. Growth capex / owner earnings = 0.19753442226118417.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2019: growth capex 0; upkeep 2856000000; owner earnings 728000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2021: growth capex 0; upkeep 2502000000; owner earnings 3522000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2022: growth capex 54474010.750240326; upkeep 3067525989.2497597; owner earnings 280474010.7502403. Growth capex / owner earnings = 0.19422124211982322.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2023: growth capex 212000000; upkeep 2616000000; owner earnings 2025000000. Growth capex / owner earnings = 0.10469135802469136.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); FY2024: growth capex 0; upkeep 2367000000; owner earnings 2776000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm (filed 2025-12-18); FY2025: growth capex 0; upkeep 2292000000; owner earnings 502000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); Dividend observations: [[2016,373000000],[2017,428000000],[2018,570000000],[2019,608000000],[2020,618000000],[2021,625000000],[2022,621000000],[2023,619000000],[2024,676000000],[2025,796000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm (filed 2025-12-18); FY2025: cash repurchases 202000000 USD.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); HPE.US SharesStats.PercentInsiders = 0.243 percentage points; cache date 2026-10-16.

### What could break it

An IRS tax dispute could require additional payments.

- Source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm (filed 2025-12-18); untry and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. There was not a material impact to our fiscal 2025 results from Pillar Two legislation. While we do not anticipate a material adverse impact to our financial position in fiscal 2026, additional changes to global tax laws are likely to occur. For instance, some countries have enacted, and others have proposed, taxes based on gross receipts applicable to digital services, regardless of profitability. Such changes may adversely affect our tax liability.

The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2020 through 2022 U.S. federal income tax returns. In the second quarter of fiscal 2025, the IRS issued a Revenue Agent Report (“RAR”) regarding the audit of our fiscal

47

Table of Contents

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Management's Discussion and Analysis of

Financial Condition and Results of Operations (Continued)

2017 through 2019 U.S. federal income tax retu

### What the price says

The price assumes cash profits grow 9.6% yearly over ten years; actual decline was 13.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-18); Ten-year compound average after fade. Initial solved rate 0.12513755676159893. Price 58.63; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.6706652126499455 → FY2025 0.37915407854984895. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-11: $13.83 per share

- 2016-12: $13.45 per share

- 2017-01: $13.18 per share

- 2017-02: $13.26 per share

- 2017-03: $13.77 per share

- 2017-04: $14.45 per share

- 2017-05: $14.59 per share

- 2017-06: $12.87 per share

- 2017-07: $13.58 per share

- 2017-08: $14.01 per share

- 2017-09: $14.71 per share

- 2017-10: $13.92 per share

- 2017-11: $13.95 per share

- 2017-12: $14.36 per share

- 2018-01: $16.40 per share

- 2018-02: $18.59 per share

- 2018-03: $17.54 per share

- 2018-04: $17.05 per share

- 2018-05: $15.24 per share

- 2018-06: $14.61 per share

- 2018-07: $15.44 per share

- 2018-08: $16.53 per share

- 2018-09: $16.31 per share

- 2018-10: $15.25 per share

- 2018-11: $15.00 per share

- 2018-12: $13.21 per share

- 2019-01: $15.59 per share

- 2019-02: $16.38 per share

- 2019-03: $15.43 per share

- 2019-04: $15.81 per share

- 2019-05: $13.72 per share

- 2019-06: $14.95 per share

- 2019-07: $14.37 per share

- 2019-08: $13.82 per share

- 2019-09: $15.17 per share

- 2019-10: $16.41 per share

- 2019-11: $15.83 per share

- 2019-12: $15.86 per share

- 2020-01: $13.93 per share

- 2020-02: $12.79 per share

- 2020-03: $9.71 per share

- 2020-04: $10.06 per share

- 2020-05: $9.71 per share

- 2020-06: $9.73 per share

- 2020-07: $9.87 per share

- 2020-08: $9.67 per share

- 2020-09: $9.37 per share

- 2020-10: $8.64 per share

- 2020-11: $11.04 per share

- 2020-12: $11.85 per share

- 2021-01: $12.34 per share

- 2021-02: $14.56 per share

- 2021-03: $15.74 per share

- 2021-04: $16.02 per share

- 2021-05: $15.96 per share

- 2021-06: $14.58 per share

- 2021-07: $14.50 per share

- 2021-08: $15.46 per share

- 2021-09: $14.25 per share

- 2021-10: $14.65 per share

- 2021-11: $14.35 per share

- 2021-12: $15.77 per share

- 2022-01: $16.33 per share

- 2022-02: $15.92 per share

- 2022-03: $16.71 per share

- 2022-04: $15.41 per share

- 2022-05: $15.60 per share

- 2022-06: $13.26 per share

- 2022-07: $14.24 per share

- 2022-08: $13.60 per share

- 2022-09: $11.98 per share

- 2022-10: $14.27 per share

- 2022-11: $16.78 per share

- 2022-12: $15.96 per share

- 2023-01: $16.13 per share

- 2023-02: $15.61 per share

- 2023-03: $15.93 per share

- 2023-04: $14.32 per share

- 2023-05: $14.42 per share

- 2023-06: $16.80 per share

- 2023-07: $17.38 per share

- 2023-08: $16.99 per share

- 2023-09: $17.37 per share

- 2023-10: $15.38 per share

- 2023-11: $16.91 per share

- 2023-12: $16.98 per share

- 2024-01: $15.29 per share

- 2024-02: $15.23 per share

- 2024-03: $17.73 per share

- 2024-04: $17.00 per share

- 2024-05: $17.65 per share

- 2024-06: $21.17 per share

- 2024-07: $19.91 per share

- 2024-08: $19.37 per share

- 2024-09: $20.46 per share

- 2024-10: $19.49 per share

- 2024-11: $21.22 per share

- 2024-12: $21.35 per share

- 2025-01: $21.19 per share

- 2025-02: $19.81 per share

- 2025-03: $15.43 per share

- 2025-04: $16.22 per share

- 2025-05: $17.28 per share

- 2025-06: $20.45 per share

- 2025-07: $20.69 per share

- 2025-08: $22.57 per share

- 2025-09: $24.56 per share

- 2025-10: $24.42 per share

- 2025-11: $21.87 per share

- 2025-12: $24.02 per share

- 2026-01: $21.52 per share

- 2026-02: $21.47 per share

- 2026-03: $23.81 per share

- 2026-04: $28.77 per share

- 2026-05: $43.04 per share

- 2026-06: $45.11 per share

- 2026-07: $47.90 per share

- 2026-08: $52.24 per share

- 2026-09: $63.89 per share

- 2026-10: $68.81 per share

## Annual estimated value (USD per share)

- FY2016: low $18.39 per share, central $19.94 per share, high $22.01 per share

- FY2017: low $16.55 per share, central $18.09 per share, high $20.14 per share

- FY2018: low $15.59 per share, central $17.36 per share, high $19.72 per share

- FY2019: low $16.00 per share, central $17.88 per share, high $20.39 per share

- FY2020: low $8.89 per share, central $9.68 per share, high $10.73 per share

- FY2021: low $8.35 per share, central $9.15 per share, high $10.21 per share

- FY2022: low $8.58 per share, central $9.38 per share, high $10.46 per share

- FY2023: low $8.89 per share, central $9.73 per share, high $10.85 per share

- FY2024: low $27.76 per share, central $30.11 per share, high $33.25 per share

- FY2025: low $23.54 per share, central $26.26 per share, high $29.87 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:34:49.273Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm); period 2025-10-31, filed 2025-12-18.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.