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Hewlett Packard Enterprise (HPE) Gains But Lags Market: What You Should Know

Hewlett Packard Enterprise (HPE) closed the most recent trading day at $17.04, moving +0.24% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.92%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq gained 0.54%.

Heading into today, shares of the information technology products and services provider had gained 14.94% over the past month, outpacing the Computer and Technology sector's loss of 5.93% and the S&P 500's loss of 0.85% in that time.

Investors will be hoping for strength from Hewlett Packard Enterprise as it approaches its next earnings release. The company is expected to report EPS of $0.46, down 11.54% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.01 billion, up 2.62% from the year-ago period.

HPE's full-year Zacks Consensus Estimates are calling for earnings of $2.03 per share and revenue of $28.67 billion. These results would represent year-over-year changes of +3.57% and +3.19%, respectively.

It is also important to note the recent changes to analyst estimates for Hewlett Packard Enterprise. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Hewlett Packard Enterprise is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that Hewlett Packard Enterprise has a Forward P/E ratio of 8.4 right now. For comparison, its industry has an average Forward P/E of 16.51, which means Hewlett Packard Enterprise is trading at a discount to the group.

It is also worth noting that HPE currently has a PEG ratio of 1.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.74 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 49, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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