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Is Hewlett Packard Enterprise Co (HPE) Stock Trading Below Fair Value?

Monday, February 26, 2024 02:35 PM | InvestorsObserver Analysts

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Is Hewlett Packard Enterprise Co (HPE) Stock Trading Below Fair Value?

Hewlett Packard Enterprise Co (HPE) receives a weak valuation score of 35 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. HPE holds a better value than 35% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

Valuation Rank - 35
HPE gets a 35 Valuation Rank today. Find out what this means to you and get the rest of the rankings on HPE!

Metrics Analysis

HPE's trailing-12-month Price to Earnings (PE) ratio of 19.18 puts it around the historical average of roughly 15. HPE is a average value at its current trading price as investors are paying around what its worth in relation to the company's earnings. HPE's trailing-12-month earnings per share (EPS) of 1.54 does justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
HPE's 12-month-forward PE to Growth (PEG) ratio of 2.57 is considered a poor value as the market is overvaluing HPE in relation to the company's projected earnings growth due. HPE's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

HPE's valuation metrics are weak at its current price due to a overvalued PEG ratio due to strong growth. HPE's PE and PEG are worse than the market average resulting in a below average valuation score. Click Here to get the full Report on Hewlett Packard Enterprise Co (HPE) stock.

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