The stock of Hewlett Packard Enterprise (HPE) is down 17% after the information technology (IT) company reported mixed financials results and offered forward guidance that missed Wall Street’s targets.
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HPE, as the company is known, posted Fiscal first-quarter earnings per share of $0.49, which was below the $0.50 consensus expectation of analysts. Revenue in the period came in at $7.85 billion., which was ahead of forecasts that called for $7.81 billion.
The company’s leading server segment brought in revenue of $4.30 billion in the quarter, which was up 29% from a year ago and just above Wall Street estimate of $4.26 billion. However, HPE posted an 8.1% operating margin for the server segment, down from 11.4% a year ago.
Weak Outlook
In terms of guidance, HPE’s management team said they expect earnings in the current quarter to be between $0.28 and $0.34 per share on revenue of $7.20 billion to $7.60 billion. That outlook was below Wall Street estimates that called for earnings of $0.50 a share and sales of $7.92 billion. For the full Fiscal year, the company expects earnings of $1.70 to $1.90, which is well below the $2.13 consensus of analysts.
Before this latest print, shares of HPE had declined 16% this year. Technology stocks have been under pressure as Wall Street sells shares of highly valued companies to mitigate risks in an uncertain environment, driven by tariffs and questions around spending on artificial intelligence (AI).
Is HPE Stock a Buy?
The stock of HPE has a consensus Moderate Buy rating among nine Wall Street analysts. That rating is based on five Buy and four Hold recommendations issued in the last three months. The average HPE price target of $24.56 implies 36.75% upside from current levels. These ratings are likely to change after the company’s financial results.
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