HPE impressive quarter is ‘not reflected enough in the stock’: Jim Cramer

Hewlett Packard Enterprise Co (NYSE: HPE) could “go a lot higher” after posting its earnings rerport for the second quarter, says famed investor Jim Cramer.

Cramer shares his view on HPE stock

The information technology company came in ahead of Street estimates for its fiscal Q2 on the back of solid demand for AI servers.

$HPE ended its recent quarter with a backlog worth just over $3.0 billion. On CNBC’s “Squawk on the Street”, Jim Cramer said today:

I underestimated how much business HPE has. This is rather incredible. It’s a very impressive quarter.

HPE stock is up nearly 13% at writing also because the management impressed with its guidance as well. The New York listed firm now expects its revenue to fall between $7.4 billion and $7.8 billion in Q3.

Analysts, in comparison, were at $7.4 billion. Hewlett Packard Enterprise also raised its outlook for the full year last night. Shares of the $25 billion company based out of Texas, United States are now up well over 30% versus their year-to-date low in late February.  

HPE shares could climb to $22

Jim Cramer is bullish on HPE stock because it has “proprietary products”. The IT company nearly doubled its free cash flow on a year-over-year basis to $610 million in Q2.

Shares of Hewlett Packard Enterprise are having their best day in years today. Still, the “break out quarter is not reflected enough in the stock”, the Mad Money host told viewer on CNBC today.

Note that Antonio Neri – chief executive of the New York listed firm confirmed last night that the pipeline of new orders was currently “multiples” higher than the backlog. According to analysts at JPMorgan:

$HPE didn’t come up in industry conversations, and even a month ago, it would be hard to imagine they would do $900 million in AI revenue, and it feels like bulls think the company is guiding conservatively.

Analysts at other investment firms took a positive tone on HPE shares this morning as well. Aaron Rakers of Wells Fargo and Matthew Sheerin of Stifel – both raised their price targets on the tech stock to $22 on Wednesday which translates to about a 13% upside from here.

You can read the full earnings release of Hewlett Packard Enterprise on this link.