DCF Studio

    HPE · NYQ · Technology

    Hewlett Packard Enterprise Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 32.50

    Market price

    USD 51.19

    Implied upside

    -36.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-10-31

    Value Per Share

    Perpetuity growth
    USD 32.50-36.5%
    Exit multiple
    USD 116.65+127.9%
    Market price
    USD 51.19

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn5bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 46.6bnUSD 54.7bnUSD 63.2bnUSD 71.9bnUSD 80.5bnUSD 88.5bnUSD 95.7bnUSD 101.7bnUSD 106.1bnUSD 108.8bn+9.9%
    EBITUSD 3.4bnUSD 4.0bnUSD 4.6bnUSD 5.3bnUSD 5.9bnUSD 6.5bnUSD 7.0bnUSD 7.4bnUSD 7.8bnUSD 8.0bn+9.9%
    NOPATUSD 3.1bnUSD 3.6bnUSD 4.2bnUSD 4.8bnUSD 5.3bnUSD 5.9bnUSD 6.4bnUSD 6.8bnUSD 7.1bnUSD 7.2bn+9.9%
    Add depreciation & amortisationUSD 4.0bnUSD 4.7bnUSD 5.4bnUSD 6.1bnUSD 6.9bnUSD 7.6bnUSD 8.2bnUSD 8.7bnUSD 9.1bnUSD 9.3bn+9.9%
    Less capital expenditureUSD -4.1bnUSD -4.9bnUSD -5.8bnUSD -6.7bnUSD -7.6bnUSD -8.5bnUSD -9.4bnUSD -10.1bnUSD -10.8bnUSD -11.2bn+11.8%
    Capex, % of revenue8.8%9.0%9.1%9.3%9.5%9.6%9.8%10.0%10.2%10.3%-
    Less increase in working capitalUSD -222.7mUSD -147.7mUSD -155.0mUSD -157.7mUSD -154.9mUSD -145.9mUSD -130.4mUSD -108.5mUSD -80.7mUSD -48.1m-15.6%
    Free cashflow to firmUSD 2.8bnUSD 3.3bnUSD 3.7bnUSD 4.1bnUSD 4.4bnUSD 4.8bnUSD 5.0bnUSD 5.2bnUSD 5.3bnUSD 5.2bn+7.4%
    Discount factor0.95630.87450.79970.73140.66880.61160.55930.51150.46780.4278-
    Present valueUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.0bnUSD 2.9bnUSD 2.8bnUSD 2.7bnUSD 2.5bnUSD 2.2bn-
    Present Value Of The ForecastUSD 27.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.312Reported 1.466, pulled toward 1.0 (Blume)
    Cost of equity10.44%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 68.0bn73.8% of capital
    Total debtUSD 24.1bn26.2% of capital, book value as a proxy
    Tax rate9.2%Effective, capped at statutory
    WACC9.35%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 32.50

    55% of EV

    Forecast FCFF, final year
    USD 5.2bn
    Capex at depreciation, working capital in reinvestment
    USD 7.2bn
    Less reinvestment at g/ROIC (26.7% of NOPAT)
    USD -1.9bn
    Capitalised
    USD 5.3bn
    ROIC (WACC floor)
    9.3%
    Terminal value, undiscounted
    USD 79.2bn
    Terminal value, discounted
    USD 33.9bn
    Enterprise value
    USD 61.3bn
    Less net debt
    USD 18.3bn
    Equity value
    USD 43.0bn

    Exit at 19.7x EBITDA

    Value per shareUSD 116.65

    84% of EV

    Terminal value, undiscounted
    USD 339.7bn
    Terminal value, discounted
    USD 145.3bn
    Enterprise value
    USD 172.7bn
    Less net debt
    USD 18.3bn
    Equity value
    USD 154.4bn

    Spread between methods: 113%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.35%48.2247.4246.6245.8345.03
    8.35%40.0239.3638.6938.0337.37
    9.35%33.6233.0632.5031.9431.38
    10.35%28.4928.0127.5327.0526.58
    11.35%24.2923.8823.4723.0522.64

    Outlined: this model. Green text: above today's price of 51.19. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year6.4%12.2%16.7%
    EBIT margin8.4%7.3%10.2%
    Discount rate-9.3%6.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.