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HPE's Networking Business Improves: What's Driving the Growth?
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Key Takeaways
HPE's Networking revenues surged 54.3% to $1.73B in Q3 2025 after acquiring Juniper
Networking operating profit climbed 43% to $360M, driven by Juniper and Intelligent Edge
The Juniper deal expands HPE into routers, firewalls, and data-center networking, boosting margins.
Hewlett Packard Enterprise’s (HPE - Free Report) networking business, which mainly included wired and wireless local area networks, data center switching, software-defined wide-area-networks, cellular network software, network security and the HPE Aruba Networking product portfolio, was accounted under the Intelligent Edge segment until the acquisition of Juniper Networks.
The recent acquisition of Juniper Networks on July 2, 2025, not only deepened its networking portfolio with new capabilities like cloud-native and AI-driven networks, but it also ramped up the new Networking segment revenues by 54.3% to $1.73 billion in the third quarter of fiscal 2025, while the Intelligent Edge business revenues grew 11% year over year.
HPE’s Networking operating profit was $360 million, up 43% year over year, benefiting from both Juniper Networks acquisition and Intelligent Edge improvements, while Intelligent Edge itself delivered an operating margin of 22.7%. HPE has acquired Juniper Networks partly to shift its networking mix toward high margin, which appears to have been accomplished.
With the acquisition of Juniper Networks, HPE has now expanded beyond campus and branch networking by incorporating routers, data-center networking, and firewalls from Juniper Networks. HPE is also expected to benefit from scaling and a lowering of competitive pressure after this acquisition.
How Competitors Fare Against HPE
Cisco (CSCO - Free Report) and Arista Networks (ANET - Free Report) are two major players in the Networking space. Arista Networks currently manufactures networking solutions, including Arista 7000 Series, 7300 Series, 7500 Series, and 7800 Series switches that are similar to Juniper’s EX Series and QFX Series switches.
In the router space, Arista 7800R4 Series, Cisco ASR and Cisco ISE compare with Juniper’s MX Series, PTX Series, and ACX Series routers. Cisco also manufactures the Catalyst Series and Nexus Series switches for both the enterprise and data center customers like Juniper Networks.
HPE’s acquisition of Juniper Networks has positioned it head-to-head with Cisco and Arista in the battle for networking leadership.
HPE’s Price Performance, Valuation and Estimates
Shares of Hewlett Packard Enterprise have gained 16.4% year to date compared with the Zacks Computer - Integrated Systems industry’s growth of 37.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 0.83, below the industry’s 3.78.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HPE’s fiscal 2025 earnings is pegged at $1.91 per share, which implies a decrease of 4% year over year. The consensus mark for fiscal 2026 is pegged at $2.40 per share, indicating a year-over-year increase of 25.5%. HPE's fiscal 2025 and 2026 earnings were revised upward in the past 30 days.
Image: Bigstock
HPE's Networking Business Improves: What's Driving the Growth?
Key Takeaways
Hewlett Packard Enterprise’s (HPE - Free Report) networking business, which mainly included wired and wireless local area networks, data center switching, software-defined wide-area-networks, cellular network software, network security and the HPE Aruba Networking product portfolio, was accounted under the Intelligent Edge segment until the acquisition of Juniper Networks.
The recent acquisition of Juniper Networks on July 2, 2025, not only deepened its networking portfolio with new capabilities like cloud-native and AI-driven networks, but it also ramped up the new Networking segment revenues by 54.3% to $1.73 billion in the third quarter of fiscal 2025, while the Intelligent Edge business revenues grew 11% year over year.
HPE’s Networking operating profit was $360 million, up 43% year over year, benefiting from both Juniper Networks acquisition and Intelligent Edge improvements, while Intelligent Edge itself delivered an operating margin of 22.7%. HPE has acquired Juniper Networks partly to shift its networking mix toward high margin, which appears to have been accomplished.
With the acquisition of Juniper Networks, HPE has now expanded beyond campus and branch networking by incorporating routers, data-center networking, and firewalls from Juniper Networks. HPE is also expected to benefit from scaling and a lowering of competitive pressure after this acquisition.
How Competitors Fare Against HPE
Cisco (CSCO - Free Report) and Arista Networks (ANET - Free Report) are two major players in the Networking space. Arista Networks currently manufactures networking solutions, including Arista 7000 Series, 7300 Series, 7500 Series, and 7800 Series switches that are similar to Juniper’s EX Series and QFX Series switches.
In the router space, Arista 7800R4 Series, Cisco ASR and Cisco ISE compare with Juniper’s MX Series, PTX Series, and ACX Series routers. Cisco also manufactures the Catalyst Series and Nexus Series switches for both the enterprise and data center customers like Juniper Networks.
HPE’s acquisition of Juniper Networks has positioned it head-to-head with Cisco and Arista in the battle for networking leadership.
HPE’s Price Performance, Valuation and Estimates
Shares of Hewlett Packard Enterprise have gained 16.4% year to date compared with the Zacks Computer - Integrated Systems industry’s growth of 37.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 0.83, below the industry’s 3.78.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HPE’s fiscal 2025 earnings is pegged at $1.91 per share, which implies a decrease of 4% year over year. The consensus mark for fiscal 2026 is pegged at $2.40 per share, indicating a year-over-year increase of 25.5%. HPE's fiscal 2025 and 2026 earnings were revised upward in the past 30 days.
Image Source: Zacks Investment Research
HPE stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here