• If you are trying to work out whether Hewlett Packard Enterprise (HPE) still offers value at its current share price, this article will walk you through what the numbers are saying in plain English.
• HPE last closed at US$21.13, with returns of 1.6% decline over 7 days, 9.1% decline over 30 days, 12.6% decline year to date, but 37.2% over 1 year, 60.4% over 3 years, and 53.7% over 5 years, which may have caught your eye.
• Recent headlines around Hewlett Packard Enterprise have kept the company on investors' radars, ranging from product announcements to broader sector commentary that often mentions HPE alongside other large IT names. This flow of news helps frame how the market is thinking about HPE's role in enterprise technology and can influence how investors respond to the share price moves you are seeing.
• Simply Wall St currently gives Hewlett Packard Enterprise a value score of 6/6, meaning it screens as undervalued on all six of its valuation checks. In this article, we will look at what different valuation methods suggest about HPE's price today and then finish with a tool that can help you judge this valuation story even more effectively.

Approach 1: Hewlett Packard Enterprise Discounted Cash Flow (DCF) Analysis

A DCF model estimates what a business could be worth by projecting its future cash flows and then discounting those back to today in $ terms. Think of it as asking what all of Hewlett Packard Enterprise’s expected future cash flows are worth in today’s money.

For Hewlett Packard Enterprise, the model used is a 2 Stage Free Cash Flow to Equity approach. The last twelve months free cash flow is about $174.5m. Analysts have provided explicit forecasts for several years, and beyond that, Simply Wall St extrapolates the numbers. By 2030, projected free cash flow is $3.891b, with intermediate yearly projections between 2026 and 2035 all discounted back to today to reflect risk and the time value of money.

Putting all of those discounted cash flows together gives an estimated intrinsic value of US$34.45 per share. Compared with the recent share price of US$21.13, the model indicates Hewlett Packard Enterprise trades at roughly a 38.7% discount, so on this measure the stock screens as undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Hewlett Packard Enterprise is undervalued by 38.7%. Track this in your watchlist or portfolio, or discover 50 more high quality undervalued stocks.

Approach 2: Hewlett Packard Enterprise Price vs Sales

For Hewlett Packard Enterprise, the preferred yardstick is the P/S ratio, which can be useful when you want to compare how the market prices each dollar of revenue, especially for companies where revenue is a key driver of valuation regardless of current earnings volatility.

In simple terms, investors usually accept a higher or lower P/S multiple depending on what they expect for future growth and how risky those cash flows appear. Higher expected growth and lower perceived risk tend to support a higher "normal" or "fair" P/S, while lower growth expectations or higher risk usually line up with a lower multiple.

Hewlett Packard Enterprise currently trades on a P/S of 0.82x. That sits below the Tech industry average of 1.82x and also below the peer group average of 2.41x. Simply Wall St’s Fair Ratio for Hewlett Packard Enterprise is 2.59x. This Fair Ratio is a proprietary estimate of what the P/S could be, based on factors such as earnings growth, industry, profit margin, market cap and company specific risks. Because it adjusts for these fundamentals, it can be a more tailored benchmark than just lining the stock up against broad industry or peer averages. Comparing 0.82x to the Fair Ratio of 2.59x suggests the shares screen as undervalued on this measure.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Hewlett Packard Enterprise Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. They let you tell a clear story about Hewlett Packard Enterprise by linking your view of its future revenue, earnings and margins to a financial forecast, then to a fair value, and finally to a simple comparison between that Fair Value and today’s Price on the Simply Wall St Community page that millions of investors use.

With Narratives, you can see how one investor might focus on risks around the Juniper merger, tariffs and memory pressures and land on a Fair Value around US$21 per share. Another investor might lean into faster AI, networking and cloud adoption and use assumptions closer to a Fair Value around US$31 per share. As news, earnings or guidance change, those Hewlett Packard Enterprise Narratives update automatically so you always see how a fresh story translates into updated numbers and a clearer sense of whether the current share price sits above or below the Fair Value you believe in.

For Hewlett Packard Enterprise however, we will make it really easy for you with previews of two leading Hewlett Packard Enterprise Narratives:

Fair value in this bullish narrative: US$31.00 per share

Implied undervaluation vs last close of US$21.13: about 31.9%

Modeled revenue growth: 11.12% a year

• This view assumes the Juniper merger, AI systems backlog and GreenLake recurring revenue together support higher margins and earnings than many current forecasts.
• It also sees HPE gaining share in next generation infrastructure, including storage, switching and Wi Fi 7, with security and sovereign cloud helping pricing power.
• It builds a fair value of US$31.00 using analyst assumptions for higher future earnings and a lower future P/E than today, discounted back using a 10.34% rate.

Fair value in this cautious narrative: US$21.00 per share

Implied overvaluation vs last close of US$21.13: about 0.6%

Modeled revenue growth: 8.55% a year

• This perspective focuses on risks from the DOJ lawsuit over the Juniper deal, tariffs, server competition and workforce reductions that could pressure margins and earnings.
• It assumes slower revenue growth and lower future profit margins than the bullish view, even while acknowledging contributions from AI systems and GreenLake.
• It arrives at a fair value of US$21.00 using lower earnings expectations and a 10.43% discount rate, with the analysts in this camp viewing prior market expectations as too high.

Do you think there's more to the story for Hewlett Packard Enterprise? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.