Is Hewlett Packard Enterprise (HPE) a Great Value Stock 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Hewlett Packard Enterprise (HPE) is a stock many investors are watching right now. HPE is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.85. This compares to its industry's average Forward P/E of 9.54. Over the past 52 weeks, HPE's Forward P/E has been as high as 9.45 and as low as 4.33, with a median of 7.58.
Investors will also notice that HPE has a PEG ratio of 1.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HPE's industry has an average PEG of 2.51 right now. Within the past year, HPE's PEG has been as high as 2.19 and as low as 0.66, with a median of 1.27.
Finally, our model also underscores that HPE has a P/CF ratio of 3.64. 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 7.24. HPE's P/CF has been as high as 8.91 and as low as 2.72, with a median of 4.83, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hewlett Packard Enterprise is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HPE feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.