What to Expect From Hewlett Packard Enterprise's Next Quarterly Earnings Report

Hewlett Packard Enterprise Company HPE, headquartered in Spring, Texas, provides solutions that allow customers to capture, analyze, and act upon data seamlessly. Valued at $25.23 billion by market cap, the company’s offerings span Cloud Services, Compute, High Performance Computing & AI, Intelligent Edge, Software, and Storage. The global edge-to-cloud company is expected to announce its fiscal third-quarter earnings for 2024 on Tuesday, Sep. 3.

Ahead of the event, analysts expect HPE to report a profit of $0.38 per share on a diluted basis, up 8.6% from $0.35 per share in the year-ago quarter. The company beat the consensus estimates in two of the last four quarters while missing on two other occasions.

For fiscal 2024, analysts expect HPE to report EPS of $1.59, up 3.3% from $1.54 in fiscal 2023.

HPE stock has underperformed the S&P 500’s ($SPX) 14.5% gains on a YTD basis, with shares up 14.3% during this period. However, it outshined the S&P 500 Technology Sector SPDR’s (XLK) 12.1% gains over the same time frame.

On Jun. 7, HPE shares rose more than 1% after Argus Research upgraded the stock to Buy from Hold.

On Jun. 5, HPE shares closed up more than 10% after reporting its Q2 results. Its net revenue of $7.20 billion surpassed consensus estimates of $6.89 billion. The company’s net income was $314 million, and adjusted EPS came in at $0.42, beating Wall Street estimates of $0.38. Meanwhile, its annualized revenue run rate (ARR) rose 37% year over year to $1.5 billion. HPE forecasted Q3 revenue to be between $7.4 billion and $7.8 billion, the midpoint higher than analyst expectations of $7.45 billion. Moreover, it expects non-GAAP EPS between $0.43 and $0.48 during Q3. 

HPE’s overall performance can be attributed to the excitement around artificial intelligence (AI) offerings. During Q2, its AI systems revenue more than doubled sequentially to more than $900 million. Demand for its AI offerings is growing at a fast pace, with enterprise orders now representing more than 15% of its $4.6 billion cumulative AI orders. Moreover, the company has tripled its enterprise AI customers in Q2 over the past year. 

Meanwhile, its acquisition of Juniper Networks, Inc. JNPR will help solidify its position in the networking market and capitalize on the rising demand for integrated solutions encompassing span computing, storage, and networking.

Analysts’ consensus opinion on HPE stock is neutral, with a “Hold” rating overall. Out of 14 analysts covering the stock, two advise a “Strong Buy” rating, one has a “Moderate Buy” rating, and 11 recommend a “Hold.” The average analyst price target for HPE is $20.25, indicating a 4.3% potential upside from the current levels.

On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.