Is Hewlett Packard Enterprise Co (HPE) overvalued?
On Equity Rank's model estimate, HPE trades close to its fair value (9% above it). Hewlett Packard Enterprise Co (HPE) last closed at $44.77; the multi-method model fair value is $40.97.
| Price | Model fair value | Price vs model |
|---|---|---|
| $44.77 | $40.97 | 9% above |
What the answer rests on
- 2 of 11 valuation methods put HPE's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, HPE's free cash flow would need to grow about 33.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -24.7% a year.
- HPE trades at 25.8 times its last year's earnings, against a median of 26.1 for 34 profitable Hardware companies.
- Over the past year the price sat below the model fair value on 6% of trading days. The gap ranged from 3% below to 24% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind HPE's fair value · What prices assume · Other companies