Have you ever wondered if Hewlett Packard Enterprise is a good deal, or if the latest product is just the beginning? You’re not alone. Today, we’re going to dig deeper into what really makes it so valuable.
The stock is up a modest 3.7% this week, but it’s still up 1.9% for the year and an impressive 110.7% over five years. This signals both momentum and the need to reconsider risk.
Much of this recent move can be related to positive sentiment toward the company’s expansion of cloud infrastructure offerings and strategic partnerships with industry leaders. Investors took notice and were quick to react to announcements of new innovations and customer wins.
Regarding these tracking fundamentals, Hewlett Packard Enterprise currently receives a 4 out of 6 on the Simply Wall St Undervalued Scorecard. This suggests it may still be worth unlocking. Next, we’ll compare several valuation approaches to uncover the most insightful way to assess the current status of a stock.
Find out why Hewlett Packard Enterprise’s 5.7% return over the last year has lagged behind its competitors.
Discounted cash flow (DCF) models estimate the value of a company by predicting future cash flows and discounting them to today’s dollars. This approach helps investors understand the value of Hewlett Packard Enterprise based on the funds it is expected to generate.
Hewlett Packard Enterprise’s most recent annual free cash flow was negative $344 million, reflecting near-term challenges. But looking to the future, analysts predict that free cash flow will rebound quickly, reaching $3.6 billion by 2029. The first five years rely on analyst forecasts, and beyond that, Simply Wall Street estimates numbers for a full 10 years.
By summing all of these projected cash flows and discounting them to their present value, Hewlett Packard Enterprise’s calculated intrinsic value is $33.89 per share. A comparison to the current trading price suggests that the stock is undervalued by approximately 35.5%.
Result: underestimation
Our discounted cash flow (DCF) analysis shows that Hewlett Packard Enterprise is undervalued by 35.5%. Track it on your watchlist, portfolio, or discover 919 stocks that are even more undervalued based on cash flow.
HPE Discounted Cash Flow as of December 2025
For more information on how we calculate Hewlett Packard Enterprise’s fair value, please see the Valuation section of our report.
The price-to-earnings (PE) ratio is a widely used metric to evaluate profitable companies like Hewlett Packard Enterprise because it connects the stock price to the actual profit the company generates. For established companies with stable or growing earnings, the P/E ratio is often an important lens through which investors can determine whether a stock is a bargain or a perfect price.
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What is considered a “normal” or “fair” P/E ratio depends on expected growth and risk. Higher expected earnings growth generally justifies a higher P/E ratio, while greater risk generally justifies a lower P/E ratio. Hewlett Packard Enterprise’s current P/E ratio is 25x. This is significantly higher than the peer average of 21.1x and higher than the broader technology industry average of 22.4x. This suggests investors may be expecting stronger growth or resilience compared to the group.
Simply Wall St’s proprietary ‘fairness ratio’ estimate helps clarify whether this premium is justified. Hewlett Packard Enterprise’s fair ratio is currently calculated at 39.7x. This reflects a model that considers HPE-specific factors such as revenue growth, profit margins, specific industries, company size, and risk profile. This approach is more robust than simply comparing HPE to its peers or the broader industry because it takes a holistic view of what should actually increase its valuation multiple.
This approach makes the stock appear undervalued relative to its fundamentals, as HPE’s current P/E of 25x is well below the fair multiple of 39.7x.
Result: underestimation
NYSE:HPE P/E ratio as of December 2025
The P/E ratio tells one story, but what if the real opportunity lies elsewhere? Discover 1,442 companies where insiders are betting big on explosive growth.
I mentioned earlier that there is a better way to understand valuation, so let me introduce you to the narrative. Narratives are a simple and powerful tool for sharing unique stories and perspectives about companies like Hewlett Packard Enterprise by connecting assumptions about future revenue, margin, and fair value projections to the bigger picture. This approach helps explain why you believe your business will succeed or why it faces challenges.
Narratives lets you connect your company’s story, including strategic acquisitions and risks, to dynamic financial forecasts and fair value estimates. This ensures that investment decisions are not just about the numbers, but about what’s driving those numbers. Simply Wall St’s narrative is easy to try and available to millions of investors via our community page, making it easy to compare fair value to the latest price to determine whether a stock is attractive.
The narrative automatically updates with each new earnings report or headline, so your view is always relevant and actionable. For Hewlett Packard Enterprise, some investors are building a bullish narrative around a strong AI partnership and recurring revenue, potentially reaching a $30.00 price target. Some might caution that legacy hardware challenges justify a goal as low as $19.00. This helps demonstrate how different perspectives can shape buying and selling decisions in real time.
Think there’s more to the Hewlett Packard Enterprise story? Visit our community to see what others are saying.
NYSE: HPE Community Fair Value as of December 2025
This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
Companies mentioned in this article include HPE.
Do you have feedback on this article? Interested in its content? Please contact us directly. Alternatively, email editorial-team@simplywallst.com.
Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.
