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Industry experts: Is there anything to HPE being misunderstood and…
Posted on 11/2/25 at 3:14 pm
Posted on 11/2/25 at 3:14 pm
Potentially a great opportunity?
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Posted on 11/2/25 at 3:14 pm to bayoubengals88
Posted on 11/2/25 at 3:35 pm to bayoubengals88
From the substack:
Valuation:
HPE trades at ~10x forward earnings and ~7x forward EBITDA. These multiples are depressed relative to networking and AI peers, which trade in the high-teens to 20x+ EPS. I believe that HPE can earn $2.30–2.50 in non-GAAP EPS by FY2027, and generate ~$3.0B of annual FCF. Applying a conservative 12–13x multiple to forward EPS and 15x to FCF gives a price range of $28–30 vs ~$23 today. That’s ~30% upside over 12–24 months.
It’s not going to knock your socks off but it could be a great longer term options play since contracts are currently cheap.
I’ve got 40 January $25s for 1.70 each.
1.70x.33=0.561
.56 + 1.70=2.26
I’d be looking to roll up and out around $2.26.
Earnings is 3 December (Q4 for them).
Valuation:
HPE trades at ~10x forward earnings and ~7x forward EBITDA. These multiples are depressed relative to networking and AI peers, which trade in the high-teens to 20x+ EPS. I believe that HPE can earn $2.30–2.50 in non-GAAP EPS by FY2027, and generate ~$3.0B of annual FCF. Applying a conservative 12–13x multiple to forward EPS and 15x to FCF gives a price range of $28–30 vs ~$23 today. That’s ~30% upside over 12–24 months.
It’s not going to knock your socks off but it could be a great longer term options play since contracts are currently cheap.
I’ve got 40 January $25s for 1.70 each.
1.70x.33=0.561
.56 + 1.70=2.26
I’d be looking to roll up and out around $2.26.
Earnings is 3 December (Q4 for them).
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