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Hewlett Packard (HPE) Down to Strong Sell on Weak FY17 View
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On Mar 9, Zacks Investment Research downgraded Hewlett Packard Enterprise Company (HPE - Free Report) to a Zacks Rank #5 (Strong Sell).The downgrade reflects negative estimate revision following an unimpressive full-year 2017outlook and growing near-term headwinds.
Why the Downgrade?
The Zacks Consensus Estimate for fiscal 2017 contracted almost 5.4% (11 cents) to $1.94 per share over the last 30 days. Similarly, for fiscal 2018, the Zacks Consensus Estimate declined 5% (11 cents) to $2.04 per share over the same time frame.
Key Factors
Hewlett Packard is witnessing a negative trend in its earnings growth rate. Management has now reduced its earnings guidance to the range of $1.88–$1.98 per share from $2.00-$2.10 for fiscal 2017.
Worldwide revenues decreased 1.9% year over year to $14.838 billion in the fourth quarter. Moreover, shipments declined 0.6% to 2.939 million. Server revenues from the company also witnessed a 2.7% decline.
Hewlett Packard Enterprise Company Price and Consensus
These declines were the result of lower growth of enterprises due to leveraging of their servers through virtualization in certain cases.
Intensifying competition continues to hurt Hewlett Packard’s market share.The company has lost market share to Dell and Huawei in recent times. As per Gartner,Dell recorded growth of 1.8% and 6.5% in revenues and shipments,respectively.Huawei’s revenues increased 88.4% while shipments were up 64% in the fourth quarter.
Further, the acquisition of EMC by Dell is acting as a headwind for Hewlett Packard.Owing to this acquisition, Dell isnow a major player in the cloud services and data storage market. In terms of the number of units shipped, Dell moved to the number one spot with a market share of 19.1%, pushing Hewlett Packard Enterprise to the second spot with 17.2% share.
Stocks to Consider
One may consider some better-ranked players in the industry like Fortinet (FTNT - Free Report) and NetApp (NTAP - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Hewlett Packard (HPE) Down to Strong Sell on Weak FY17 View
On Mar 9, Zacks Investment Research downgraded Hewlett Packard Enterprise Company (HPE - Free Report) to a Zacks Rank #5 (Strong Sell).The downgrade reflects negative estimate revision following an unimpressive full-year 2017outlook and growing near-term headwinds.
Why the Downgrade?
The Zacks Consensus Estimate for fiscal 2017 contracted almost 5.4% (11 cents) to $1.94 per share over the last 30 days. Similarly, for fiscal 2018, the Zacks Consensus Estimate declined 5% (11 cents) to $2.04 per share over the same time frame.
Key Factors
Hewlett Packard is witnessing a negative trend in its earnings growth rate. Management has now reduced its earnings guidance to the range of $1.88–$1.98 per share from $2.00-$2.10 for fiscal 2017.
Worldwide revenues decreased 1.9% year over year to $14.838 billion in the fourth quarter. Moreover, shipments declined 0.6% to 2.939 million. Server revenues from the company also witnessed a 2.7% decline.
Hewlett Packard Enterprise Company Price and Consensus
Hewlett Packard Enterprise Company Price and Consensus | Hewlett Packard Enterprise Company Quote
These declines were the result of lower growth of enterprises due to leveraging of their servers through virtualization in certain cases.
Intensifying competition continues to hurt Hewlett Packard’s market share.The company has lost market share to Dell and Huawei in recent times. As per Gartner,Dell recorded growth of 1.8% and 6.5% in revenues and shipments,respectively.Huawei’s revenues increased 88.4% while shipments were up 64% in the fourth quarter.
Further, the acquisition of EMC by Dell is acting as a headwind for Hewlett Packard.Owing to this acquisition, Dell isnow a major player in the cloud services and data storage market. In terms of the number of units shipped, Dell moved to the number one spot with a market share of 19.1%, pushing Hewlett Packard Enterprise to the second spot with 17.2% share.
Stocks to Consider
One may consider some better-ranked players in the industry like Fortinet (FTNT - Free Report) and NetApp (NTAP - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>