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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Hewlett Packard Enterprise Company (XNYS:HPE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HPE
Name:
HEWLETT PACKARD ENTERPRISE COMPANY (XNYS:HPE)
Sector:
- 700000.00K
Industry:
Communication Equipment
CEO:
Mr. Antonio Neri
Total Employees:
60,400
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 275.68% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HEWLETT PACKARD ENTERPRISE COMPANY(HPE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMMUNICATION EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
13.24
One Month Price Target:
$13.33
Six Month Price Target :
$13.76
Likely Price in One Year's Time:
Ticker:
$14.28
Likely Trading Range Today Under (Normal Volatility)
$13.18
Price Upper limit ($) :
$13.3
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$12.53
This week:
$11.65
This month :
$10.06
Other Primary facts
Market Cap:
16.92B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
1.29B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.18%
-15.31%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$16.54
$15.04
$9.94
$11.44
Medium risk (<10%) entry points
Buy Call
Sell Call
$14.55
Buy Put:
Sell Put:
$14.23
$11.93
$12.25
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HPE
Sharpe Ratio:
-0.03%
Comparison:
HPE, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -101.94% lower than the industry
& is -101.10% lower than the market/S&P 500 average
Average Returns/Yield of
HPE
Daily returns:
0.01%
Weekly returns:
0.04%
Monthly returns:
0.16%
Yearly returns:
12.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is -84.75% below industry average
Classification:
HPE, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.43
Statistical test of Returns:
HPE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.62%
Weekly Volatility:
5.86%
Monthly Volatility:
11.72%
Yearly Volatility:
40.60%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.60%
Volatility in last five trading days has been -77.24% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.37%
Weekly VaR:
-12.02%
Monthly VaR:
-24.03%
How Much Can the price of
HPE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-83.25%
This translates to price declining to:
$10.44
This translates to price declining to:
$2.22
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
HPE is a 69.62% riskier investment compared to the market/S&P 500 & is 45.32% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -17.29% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HPE
Beta in relation to market/S&P 500--1.16
Expected beta in 1 year's time:
0.746
Expected beta in 3 year's time:
1.055
Unlevered (debt free) Beta:
0.784
Beta in relation to Nasdaq (XNAS):
0.772
Beta in relation to all global stocks::
0.749
Beta Comparison & Analysis
Beta of competitors/peers::
1.293
Beta is -9.90% lower than peers
Average Industry Beta:
1.197
Beta is -2.70% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.04%
Sustainable growth rate is -64.89% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.092
Alpha is -697.21% below industry average alpha yield
Alpha is -583% below the market average
Analysis of Cost of Capital of
HPE
Equity cost of capital:
0.111
Equity cost of capital is -1.95% below industry mean WACC
Unlevered (without debt) cost of capital:
7.49%
Before-tax cost of debt:
1.14%
After-tax cost of debt:
0.90%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.90%
WACC is 1.73% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$21.70
Revenue growth rate per share of (3Y):
0.84
Annual revenue growth rate is -66.04% below industry average
EPS:
$2.78
Expected Annual growth rate of EPS (3Y):
52.93%
Expected future EPS growth rate is 230.68% higher than the Communication Equipment industry
Free cash flow (FCF) per share:
$1.24
Balance sheet equity growth per share: 27.59%
Equity growth rate per share is -1292.38% lower than the industry
Debt per share
$7.99
EBITDA per share
$5.09
Valuation Analysis Today of
HPE
P/E Ratio:
4.74
P/E Ratio of Competitors/Peers:
27.27
P/E ratio is -82.63% lower than main peers & is -87.24% lower than the industry
Stock price/value with industry average P/E ratio: $103.20
HPE is -87.17% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $33.46
Present value of the expected future dividends only: $4.31
P/S (Price to Sales ratio):
0.61
Price to sales ratio is -73.36% below the industry mean
P/B (Price to book value ratio):
0.84
Price to free cash flow: 10.66
-
Net income growth rate (3Y):
109.00%
Net income growth rate is -76.09% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.18%
Dividend yeild: 3.63%
Previous Dividend: $0.12
Previous adjusted dividend: $0.12
Previous Dividend: $0.48
-
-
Average dividend payment (long-term): $0.12
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 10/06/2022
Expected next dividend record date: 09/12/2022
-
Previous dividend payment date: 07/08/2022
Previous dividend record date: 13/06/2022
-
Dividend History:
2022-06-10--$0.12
2021-12-09--$0.12
2021-06-15--$0.12
2022-03-10--$0.12
2021-09-10--$0.12
2021-03-09--$0.12
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
50.58%
Net debt to equity ratio:
50.26%
Debt to assets ratio:
17.76%
Net debt to assets ratio:
17.64%
Debt-to-asset ratio is -67.91% below industry average
Ability to repay debt:
Interest coverage ratio:
40.68
Interest coverage ratio is 11.58% more than industry average
Looking forward:
Debt growth rate:
-9.62%
Annual debt growth is -5% lower than industry average debt growth rate
Debt repayment rate in last quarter: 5.80%
Analysis of Key Statistics
Correlation of price movement with the market:
0.654
Statistical significance of correlation:
HPE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is 18.49% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
0.054
Covariance of price movement with the market:
0.082
Kurtosis
5.638
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.294
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HPE
Gross Profit Margin Ratio:
133%
Operating Profit Margin Ratio:
4.61%
Operating profit margin is -28.32% lower than the industry
Net Profit Margin Ratio:
133%
Effective Tax Rate:
4.01%
Effective tax rate is -85.62% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.25%
Return on equity (ROE) is -47.46% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.41%
Return on assets (ROA) is 46.72% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
0.94
Current ratio is -57.54% below industry average
Cash Conversion Cycle (days):
-58.6
Cash conversion cycle is -193.57% below industry average
The remaining useful life of property plant & equipment is: 7.9 years
Stock based compensation to net income ratio:
3.45%
In-depth Efficiency Analysis
Revenue generated per employee:
462.3K
Each employee generates -16% less revenue than industry average revenue per employee
EBITDA generated per employee:
108.4K
Each employee generates 44% more EBITDA than industry average revenue per employee
Profit generated per employee:
61.4K
Each employee generates 149% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.6K
Each employee generates 635% more free cash flow than industry average revenue per employee
Assets/Capital per employee
637.9K
Each employee generates 635% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 5.60%
Growth rate in R&D investment/expenditure is -342.15% lower than the industry
Competitors/Peer firms of
HPE
DiDi Global Inc. (OTCM:DIDIY)
PAYCOM SOFTWARE, INC. (XNYS:PAYC)
Bill.com Holdings Inc (XNYS:BILL)
CGI INC. (XNYS:GIB)
HUBSPOT, INC. (XNYS:HUBS)
BROADRIDGE FINANCIAL SOLUTIONS, INC. (XNYS:BR)
TYLER TECHNOLOGIES, INC. (XNYS:TYL)
SARATOGA INVESTMENT CORP. (XNYS:SAK)
FLEETCOR TECHNOLOGIES, INC. (XNYS:FLT)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�67%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
27.93B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
18.61B
9.32B
2.03B
-
5.02B
-
369.00M
7.42B
-
161.00M
2.53B
6.55B
1.29B
3.71B
3.86B
155.00M
3.71B
Statement of Cash Flow
Date:
Period:
621.00M
Differed Income Tax :
37.00M
Stock Based Compensation :
128.00M
Change in Working Capital :
- 1400000.00K
Accounts Receivables:
543.00M
Other Working Capital:
- 852000.00K
Other Non-Cash Items:
25.00M
Net Cash Provided by Operating Activities:
- 76000.00K
Investments in PP&E:
- 624000.00K
Net Acquisitions:
-
Purchases of Investments:
- 21000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/31/22
2022
Q1
3.86B
-
3.86B
7.25B
5.32B
2.91B
19.34B
5.50B
-
-
2.25B
-
11.53B
38.53B
-
57.87B
6.55B
3.80B
166.00M
3.46B
6.67B
20.47B
10.28B
6.76B
17.04B
-
37.51B
13.00M
- 5239000.00K
- 2878000.0K
28.42B
January 31, 2022 at 7:00:00 AM
26.03B
20.32B
57.83B
-
14.07B
10.2B
44.00M
266.00M
- 335000.00K
- 633000.00K
-
- 129000.00K
- 155000.00K
1.27B
355.00M
-
- 56000.00K
4.28B
4.33B
- 76000.00K
- 624000.00K
- 700000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
HPE
2023
2024
2025
2026
2027
$14.35
$46.31
$49.94
$53.84
$58.06