Hewlett Packard Enterprise Co. is a global edge-to-cloud company, actively engaging in the provision of information technology, technology and enterprise products, solutions and services. It operates through various segments namely Compute (general purpose servers for multi-workload computing, workload optimized servers for demanding applications), the High Performance Computing & Artificial Intelligence (offers hardware and software solutions to support specific use cases), the Storage (provides workload optimized storage product and service offerings), the Intelligent Edge (offers wired and wireless local area network, campus and data center switching, software-defined wide-area-network, network security and associated services to enable secure connectivity) and the Financial segment (which provides flexible investment solution and consumption models that support business transformation).
Last week, HPE’s partner Nvidia continued to smash consensus estimates, with revenue and EPS up 206% and nearly 600% from prior year period, mainly contributed by its outstanding performance in data center segment. Could HPE deliver the same good news for investors just like Nvidia? We shall wait and see its Q4 2023 earnings result scheduled to be released on 28th November (Tuesday), after market close.
In the previous quarter, HPE reported $7.02B in sales revenue, slightly above analysts’ forecast $6.99B. By segment, Compute generated the most revenue at $2.6B, but still down -10% from the same period last year. Intelligent Edge generated $1.4B, up 53% (y/y); High Performance Computing & AI and Financial services were up 3% (y/y) and 7% (y/y) respectively, to $836 million and $873 million respectively; Some gains were slightly offset by Storage, which was down -2% (y/y) to $1.07B.
Non-GAAP gross margin was at 35.9% in Q3 2023, up 1.2pts from the same period last year. This was mainly contributed by the company’s improved portfolio mix and pricing discipline. In addition, annualized revenue run rate (ARR) has expanded 48% to $1.3B, with growth in software/services as the main contributor (68%), followed by infrastructure (21%) and financial services (11%). The management projected ARR CAGR for the next 3 years between 35% to 45%.
HPE Management Outlook for Q4 2023:
- Revenue: $7.2B – $7.5B
- Non-GAAP diluted net EPS: $2.11 – $2.15
- Non-GAAP Operating Profit: 6% – 7%
Technical Analysis:
#HewlettPackard share price remains traded within an ascending wedge, last closed above 100-week SMA which coincides with FR 61.8% ($15.50), which extended from the high in Feb 2022 to the low in Sep 2022. Price momentum in general remains muted. The asset price must break below the 100-week SMA, the FR 61.8% ($15.50) and the bottom line of the wedge, to extend further down towards the next support at $14.80 (FR 50.0%). On the other hand, nearest resistance zone is found at $16.50 – $16.95, followed by $17.75.
Click here to access our Economic Calendar
Larince Zhang
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
