From Nasdaq: 2025-06-05 23:59:00

Hewlett Packard Enterprise (HPE) exceeded analyst expectations in Q2 fiscal 2025 with earnings of $0.38 per share on revenues of $7.6 billion. Despite this, stock remained stagnant at $18. Tightened full-year revenue growth forecast to 7%-9%. Consider diversified investment options like Trefis High Quality portfolio for steady returns.

HPE stock appears undervalued at $18 per share, trading at 0.7 times its trailing revenues. Valuation multiples have decreased due to average revenue growth of 3% over the last three years. However, faster growth is projected, with sales expected to rise by 8% this year and an additional 6% next year.

HPE’s Q2 performance showed 6% revenue growth with ARR reaching $2.2 billion driven by hybrid cloud, intelligent edge, and server sales. Adjusted earnings were $0.38 per share, beating estimates. Analysts project 8% sales growth this year, suggesting an upside potential of over 15% with an average price target of $21.

HPE focuses on its edge-to-cloud transition with GreenLake hybrid cloud offering, capturing recurring revenue. Strategic shift towards edge, hybrid cloud, and AI through GreenLake platform, along with partnership with NVIDIA for AI solutions, positions HPE competitively. Potential risks include underperformance during economic downturns.

Consider risks before investing in HPE stock, historically underperforming during economic downturns. Diversify risk by considering the High Quality portfolio for strong upside potential. As a group, HQ Portfolio stocks have outperformed the S&P 500 with returns over 91% since inception.



Read more at Nasdaq: What’s Next For HPE Stock?