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Is Hewlett Packard Enterprise (HPE) a Great Value Stock Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to...

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This story originally appeared on Zacks

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Hewlett Packard Enterprise (HPE). HPE is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.30, while its industry has an average P/E of 12.70. HPE's Forward P/E has been as high as 8.95 and as low as 5.48, with a median of 7.61, all within the past year.

HPE is also sporting a PEG ratio of 0.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HPE's PEG compares to its industry's average PEG of 1.09. HPE's PEG has been as high as 1.51 and as low as 0.61, with a median of 0.93, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HPE has a P/S ratio of 0.71. This compares to its industry's average P/S of 1.86.

Finally, investors will want to recognize that HPE has a P/CF ratio of 5.39. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. HPE's current P/CF looks attractive when compared to its industry's average P/CF of 9.86. Over the past 52 weeks, HPE's P/CF has been as high as 7.10 and as low as 3.15, with a median of 5.66.

These are just a handful of the figures considered in Hewlett Packard Enterprise's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HPE is an impressive value stock right now.



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