Is it too late to sell Hewlett Packard Enterprise shares after reporting weak FQ4 revenue?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Dec 1, 2021
  • Hewlett Packard shares on Wednesday edged slightly lower after Tuesday’s earnings.
  • The company reported its fiscal fourth-quarter results after markets closed, beating earnings estimates.
  • However, reported revenue failed to match Street estimates.

On Wednesday, Hewlett Packard Enterprise Co (NYSE:HPE) shares edged slightly lower after announcing its most recent quarterly results. The company reported its fiscal fourth-quarter results Tuesday after markets closed, beating earnings estimates. However, HPE’s revenue for the quarter came below Street estimates.

The company posted FQ4 non-GAAP earnings per share of $0.52, outperforming the average analyst estimate of $0.49. On the other hand, its GAAP EPS of $1.91, was higher than the Street forecast of $0.19, while revenue for the quarter increased marginally by 1.9% from the same quarter in 2020 to $7.35 billion, $20 million below expectations.

Hewlett Packard Enterprise looks undervalued

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From an investment perspective, HPE shares trade at a lucrative P/E ratio of 5.51, making the stock a compelling option for value investors.

However, analysts expect its EPS to decline by 122% this year, before growing at an average annual rate of 16.83% over the next five years. Therefore, short-term bargain hunters may take caution before buying. 

On the other hand, the stock trades at an attractive forward dividend yield of 3.38% after declaring a quarterly dividend of $0.12 per share. As a result, it could also gain the attention of dividend investors.

Source – TradingView

Technically, HPE shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target technical rebounds at about $14.59, or higher at $14.98, while $13.86 and $13.44 are crucial support zones.

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