| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 49 | 32.0x | 17.8x | Around median | |
Growth | 91 | 26.6% | 7.1% | Top tier | |
Quality | 63 | 5.6% | 4.5% | Around median | |
Safety | 56 | 2.0x | 2.6x | Around median | |
Capital Return | 39 | 0.89% | 2.12% | Bottom tier | |
Momentum | 99 | 132.7% | 2.9% | Top tier | |
Sentiment | 45 | 12 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Hewlett Packard Enterprise sells infrastructure and technology solutions to enterprises, sovereign entities, and cloud service providers, and organizes its business into two main segments: Networking and Cloud & AI. The Networking segment includes Campus & Branch solutions, routing, data center switching, security, and AI-powered network operating software, while Cloud & AI includes traditional servers, AI systems, storage, private cloud, and GreenLake services; HPE Financial Services also provides financing that helps customers make infrastructure and AI investments.
In the third quarter of fiscal 2026, record revenue reached $12.2 billion, up 34% year over year, while net income according to EDGAR data was approximately $1.5 billion and GAAP earnings per share were $1.06. The company also reported a non-GAAP gross margin exceeding 40%, non-GAAP operating profit of $2 billion, an operating margin of 16.2%, adjusted earnings per share of $1.11, and free cash flow of $958 million.
Cloud & AI accounted for most of the quarterly mix, with revenue of $9 billion, growth of 25%, and an operating margin of 17%, supported by 35% growth in server revenue and AI systems revenue approaching $1.6 billion. The Networking segment generated revenue of $2.9 billion, up 10% on a normalized basis, with an operating margin of 22%; within the segment, Campus & Branch grew 8%, routing grew 23%, and security grew 12%, while data center networking revenue declined 6% due to shipment timing related to supply constraints.
The average analyst target is $67.75, within a wide range of $54 to $86, compared with the stock's 52-week range of $19.84 to $64.25; the average target therefore sits slightly above the top of the 52-week range, while the highest target exceeds that high by a greater margin. The Buy consensus supports the growth outlook, but Morgan Stanley's reduction of its target from $71 to $69 adds a degree of caution, while the P/E multiple of 25.8 times and EV/EBITDA of 17.4 times cited in the September 2, 2026 news indicate that the valuation assumes continued AI growth and conversion of the record backlog into earnings and cash despite the expected moderation in margins.
Figures in the text are as of 2026-09-04; the live price is shown at the top of the page.
Revenue reached $12.2 billion, up 34% year over year, driven by traditional servers, AI systems, and Networking. Cloud & AI generated revenue of $9 billion, while Networking recorded $2.9 billion. Adjusted earnings per share were $1.11 and GAAP earnings per share were $1.06, with free cash flow of $958 million.
AI systems revenue was approximately $1.6 billion, while orders reached $2.4 billion, up more than 30% sequentially. The backlog for these systems increased 14% to a record level, while management said the potential order pipeline was several times the backlog. After the quarter ended, HPE secured a $3.5 billion inference server deal with a hyperscaler customer for internal use.
Juniper expands HPE's presence in Campus & Branch, routing, data center switching, and AI-powered networking. In the third quarter of fiscal 2026, Networking revenue was $2.9 billion and its operating margin was 22%, while orders grew 36%, approximately 3.5 times the rate of revenue growth. HPE aims to achieve annualized savings of $600 million by the end of fiscal 2028, while QFX and PTX products and the Oracle deal support expansion in AI infrastructure.
Automated analysis for informational purposes only — not investment advice.
Management expects consolidated revenue growth of 13% to 17% in fiscal 2027, with Networking growth of 14% to 17% and Cloud & AI growth of 14% to 18%. It expects earnings per share of $4.40 to $4.60, operating profit growth of 14% to 18%, and a consolidated operating margin of 14% to 15%. It also targets free cash flow of at least $5 billion, representing expected annual growth of 33%.
Management expects gross margin to moderate after exceeding 40% in the third quarter of fiscal 2026 because the sales mix will shift more heavily toward AI systems and because traditional server pricing and deal mix will normalize. It also expects Cloud & AI margin to decline from 17% in the third quarter to the mid-teens in the fourth quarter, then to approximately 13% in fiscal 2027. A higher Networking mix, Juniper savings, and the Catalyst program may offset some of this pressure, but they do not eliminate management's guidance for moderation.
The primary obstacle is shortages of DDR5, DDR4, NAND, and other components affected by chip production capacity, constraints that management said on September 2, 2026 would persist. Due to supply-related shipment timing, data center networking revenue declined 6% in the third quarter of fiscal 2026 despite high-double-digit order growth in routing and data center switching. To address this, HPE entered into multiyear supply agreements, doubled its networking purchase commitments sequentially, and increased inventory to $11.8 billion.
