Hewlett Packard Enterprise Stumbles in Q1: Earnings Beat, Revenue Misses

Hewlett Packard Enterprise Stumbles in Q1: Earnings Beat, Revenue Misses

Hewlett Packard Enterprise (HPE: NYE) reported mixed results for its Q1 of fiscal 2024. The mixed results posed new questions about the future performance of HPE’s stock. 

 

Key Highlights from Hewlett’s Q1 Earnings:

 Here are the key Insights from the Q1 report of Hewlett Packard Enterprise  

  1. Earnings beat estimates: HPE reported adjusted EPS of $0.48, exceeding analyst estimates of $0.45. However, this represented a decrease of 23.8% compared to the same quarter last year.
  2. Revenue misses expectations: Despite exceeding EPS expectations, HPE’s net revenue of $6.76 billion fell short of analyst estimates of $7.09 billion and represented a 13.5% decline year-over-year.
  3. Mixed performance across segments: HPE’s Intelligent Edge segment saw a 3% year-over-year revenue increase, while the newly formed Server segment experienced a 23% decline. The Hybrid Cloud segment also reported a 10% decrease in revenue compared to the prior year period.

Following the announcement of these results, Hewlett Packard Enterprise’s stock dipped about 2% in after-hours trading, which might be a fresh source of worry for investors despite the earnings per share exceeding expectations.

Stock Target Advisor’s View on Hewlett Packard Enterprise:

Stock Target Advisor rates HPE as a Buy with a target price of $17. We are projecting an approximate 11.62% price change over the next 12 months. If we look at the ratings from analysts, HPE maintains a Hold rating with an average target price of $17.00. In terms of investment signals, we detect a Slightly Bullish sentiment, backed by 8 positive signals and 4 negative signals.

04 analysts covering HPE, an average rating holds at Hold with a price target ranging from $15 to $20. The Communication Equipment sector, where HPE operates, has evidenced mixed returns over the past month and week, and Stock Target Advisor currently rates HPE as Neutral in this sector.

 

Conclusion:

HPE’s Q1 results paint a picture of a company navigating a challenging market environment. While the company exceeded EPS expectations, the overall revenue decline and mixed performance across segments raise concerns for investors.

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