- If you are wondering whether Hewlett Packard Enterprise at around US$24.98 is still offering value or if most of the upside has already been captured, the starting point is to understand what the current price actually reflects.
- The stock has shown strong returns over several time frames, with 4.2% over the last 7 days, 14.5% over the last 30 days, 3.4% year to date, 76.6% over the past year, 69.6% over 3 years and 83.2% over 5 years.
- Recent headlines have focused on Hewlett Packard Enterprise's role in key technology infrastructure and its positioning within broader enterprise IT trends. This helps frame how investors are thinking about future demand and profitability, and provides context when comparing the current share price to various valuation estimates.
- On Simply Wall St's 6 point valuation framework, Hewlett Packard Enterprise currently scores 5 out of 6. The next sections will break down what different valuation approaches say about the stock and finish with a way to tie those numbers to a fuller view of the business.
Approach 1: Hewlett Packard Enterprise Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today using a required rate of return. The goal is to estimate what those future dollars are worth right now.
For Hewlett Packard Enterprise, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow stands at about $1.76b. Analysts have supplied several years of forecasts, and from 2026 through 2035 the projections used in this model range from around $2.28b to just over $4.03b in free cash flow, all in dollar terms. Beyond the explicit analyst horizon, Simply Wall St extrapolates additional free cash flow estimates to complete the 10 year projection path.
When all of those projected cash flows are discounted back to today and summed, the model arrives at an estimated intrinsic value of about $34.15 per share, compared with a current share price near $24.98. That gap implies the stock is about 26.9% undervalued on this DCF view.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Hewlett Packard Enterprise is undervalued by 26.9%. Track this in your watchlist or portfolio, or discover 63 more high quality undervalued stocks.
Approach 2: Hewlett Packard Enterprise Price vs Sales
For Hewlett Packard Enterprise, the preferred yardstick here is the P/S ratio, which can be useful for assessing companies where revenue is a key focus and earnings may be less informative on their own. A higher growth outlook or lower perceived risk can justify a higher P/S multiple, while slower expected growth or higher risk tends to support a lower, more conservative multiple.
Hewlett Packard Enterprise currently trades on a P/S of 0.93x. That sits below the broader Tech industry average of about 1.60x and well below the peer group average of 4.98x. Simply Wall St’s “Fair Ratio” for Hewlett Packard Enterprise is 2.57x, which is an estimate of the P/S multiple that would be expected given factors such as its growth profile, profit margins, risk characteristics, industry and market cap.
This Fair Ratio is more tailored than a simple comparison with peers or the sector, because it adjusts for company specific attributes rather than assuming all Tech names should trade on similar multiples. Comparing the current 0.93x P/S to the 2.57x Fair Ratio suggests Hewlett Packard Enterprise shares are trading below this model-based estimate.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Hewlett Packard Enterprise Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so this is where Narratives come in, giving you a simple story that connects your view of Hewlett Packard Enterprise to specific forecasts for revenue, earnings and margins, and then to a fair value that you can compare with the current share price.
On Simply Wall St’s Community page, Narratives let you set out your own storyline, link it to numbers, and see how your Hewlett Packard Enterprise fair value stacks up against the live market price, which can help you decide whether the stock looks cheap, expensive or about right based on your assumptions.
Narratives also refresh as new information arrives, for example earnings releases, Juniper related news or updated analyst targets. This means your fair value view is not static but adjusts when the facts change without you needing to rebuild every model from scratch.
For Hewlett Packard Enterprise right now, one investor might align with a higher fair value around US$32.00 and another with a lower fair value near US$21.00. Narratives make those different perspectives transparent by tying each story to its own forecasts, P/E assumptions and fair value so you can quickly see which version of the future you find more reasonable.
For Hewlett Packard Enterprise however we'll make it really easy for you with previews of two leading Hewlett Packard Enterprise Narratives:
Both are built from the same analyst data, but they interpret the next few years very differently. Use them as bookends to decide where your own expectations sit between optimism and caution.
🐂 Hewlett Packard Enterprise Bull Case
Fair value: US$32.00 per share
Gap to this fair value from the last close of US$24.98: around 22% below that fair value level
Revenue growth assumption: about 10.7% a year
- Assumes the Juniper merger, AI systems backlog and GreenLake recurring revenue help HPE reach higher margins and earnings than many analysts currently model.
- Builds in rising net profit margins to a little over 8% over the next few years, alongside earnings of about US$3.9b and a P/E of 15x by around 2029.
- Requires confidence that HPE can manage competition, regulation, and the shift toward software and as a service without these risks derailing that higher earnings path.
🐻 Hewlett Packard Enterprise Bear Case
Fair value: US$21.00 per share
Gap to this fair value from the last close of US$24.98: around 19% above that fair value level
Revenue growth assumption: about 7.1% a year
- Focuses on risks from the DOJ action on the Juniper deal, tariffs, server market pressure and restructuring costs, which could weigh on margins and earnings.
- Builds in earnings of about US$4.0b by around 2028, but pairs that with a lower assumed P/E of 7.2x, which keeps the fair value closer to US$21.00.
- Reflects a view that, even if the business improves, the current price already bakes in a lot of success, so any stumble on integration, AI demand or cost control could matter for returns.
If you want to see how other investors are joining the dots between these numbers, revenue paths and fair values, you can step through the full range of Hewlett Packard Enterprise community views directly from See what the community is saying about Hewlett Packard Enterprise.
Do you think there's more to the story for Hewlett Packard Enterprise? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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