Pay Less, Gain More: DELL, SMCI Top Hewlett Packard Enterprise Stock
DELL, SMCI are Hewlett Packard Enterprise’s peers in Technology Hardware, Storage & Peripherals industry that have:
1) Lower valuation (P/OpInc) compared to Hewlett Packard Enterprise stock
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying DELL, SMCI stocks vs. HPE stock
Key Metrics Compared
- HPE’s AI Orders Double With One Major Catch
- Hewlett Packard Enterprise Just Activated A Time Machine
- The Bear Case: How HPE Behaves During Market Shocks
- SMCI Looks Smarter Buy Than Hewlett Packard Enterprise Stock
- Hewlett Packard Enterprise Stock Surged 40%, Here’s Why
- With Hewlett Packard Enterprise Stock Sliding, Have You Assessed The Risk?
| Metric | HPE | DELL | SMCI |
|---|---|---|---|
| P/OpInc* | 28.6x | 23.7x | 12.1x |
| LTM OpInc Growth | 1.7% | 63.1% | 15.1% |
| 3Y Avg OpInc Growth | -4.8% | 29.1% | 31.2% |
| LTM Revenue Growth | 22.6% | 38.6% | 56.2% |
| 3Y Avg Revenue Growth | 10.0% | 12.9% | 72.8% |
OpInc = Operating Income, P/OpInc = Price To Operating Income Ratio
But do these numbers tell the full story? Read Buy or Sell HPE Stock to see if Hewlett Packard Enterprise still has an edge that holds up under the hood. As a quick background, Hewlett Packard Enterprise (HPE) provides solutions for seamless data capture, analysis, and action, offering multi-workload servers and the HPE Aruba portfolio of wired and wireless networking hardware.
This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Hewlett Packard Enterprise stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Hewlett Packard Enterprise in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Hewlett Packard Enterprise would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | HPE | DELL | SMCI |
|---|---|---|---|
| P/OpInc* | 13.4x | 8.6x | 24.1x |
| LTM OpInc Growth | -29.0% | 30.3% | -33.2% |
| 3Y Avg OpInc Growth | -8.9% | 13.6% | 23.5% |
| LTM Revenue Growth | 14.5% | 18.8% | 34.8% |
| 3Y Avg Revenue Growth | 7.1% | 4.4% | 66.3% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | HPE | DELL | SMCI |
|---|---|---|---|
| P/S | 1.7x | 1.9x | 0.5x |
| Market Cap (Current) | $ 64.3 Bil | $ 256.7 Bil | $ 18.3 Bil |
| LTM Revenue | $ 38.79 Bil | $ 134.00 Bil | $ 33.70 Bil |
| LTM Opinc | $ 2.25 Bil | $ 10.85 Bil | $ 1.51 Bil |
| LTM Op Margin | 5.8% | 8.1% | 4.5% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed its benchmark – a combination of the S&P 500, Russell, and S&P midcap index.