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Are Investors Undervaluing Hewlett Packard Enterprise (HPE) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 - Free Report) . HPE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.49. This compares to its industry's average Forward P/E of 9.84. Over the last 12 months, HPE's Forward P/E has been as high as 8.95 and as low as 5.48, with a median of 7.06.
Investors will also notice that HPE has a PEG ratio of 0.94. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HPE's industry has an average PEG of 2.59 right now. Within the past year, HPE's PEG has been as high as 2.19 and as low as 0.61, with a median of 1.30.
Another valuation metric that we should highlight is HPE's P/B ratio of 1.28. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.05. Within the past 52 weeks, HPE's P/B has been as high as 1.28 and as low as 0.66, with a median of 0.79.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HPE has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.83.
Finally, investors will want to recognize that HPE has a P/CF ratio of 6.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HPE's current P/CF looks attractive when compared to its industry's average P/CF of 7.24. HPE's P/CF has been as high as 6.94 and as low as 3.13, with a median of 3.82, all within the past year.
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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Are Investors Undervaluing Hewlett Packard Enterprise (HPE) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 - Free Report) . HPE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.49. This compares to its industry's average Forward P/E of 9.84. Over the last 12 months, HPE's Forward P/E has been as high as 8.95 and as low as 5.48, with a median of 7.06.
Investors will also notice that HPE has a PEG ratio of 0.94. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HPE's industry has an average PEG of 2.59 right now. Within the past year, HPE's PEG has been as high as 2.19 and as low as 0.61, with a median of 1.30.
Another valuation metric that we should highlight is HPE's P/B ratio of 1.28. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.05. Within the past 52 weeks, HPE's P/B has been as high as 1.28 and as low as 0.66, with a median of 0.79.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HPE has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.83.
Finally, investors will want to recognize that HPE has a P/CF ratio of 6.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HPE's current P/CF looks attractive when compared to its industry's average P/CF of 7.24. HPE's P/CF has been as high as 6.94 and as low as 3.13, with a median of 3.82, all within the past year.
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.