Valued at a market cap of $22.1 billion, Hewlett Packard Enterprise Company (HPE) is an information technology company that provides solutions to help customers capture, analyze, and act on data seamlessly. The Spring, Texas-based company focuses on enterprise IT solutions, including servers, storage, networking, and cloud services. 

Shares of this tech company have underperformed the broader market over the past 52 weeks. HPE has gained 2% over this time frame, while the broader S&P 500 Index ($SPX) has soared 12.3%. Moreover, on a YTD basis, the stock is down 21% compared to SPX’s 3.3% loss. 

Narrowing the focus, HPE has also lagged behind the Technology Select Sector SPDR Fund’s (XLK) 9.9% gain over the past 52 weeks and 6.8% fall on a YTD basis. 

Shares of HPE crashed 12% in the following trading session after its mixed Q1 earnings release on Mar. 6. The company posted revenue of $7.9 billion, which grew 16.3% from the year-ago quarter and surpassed the consensus estimates. Strong growth in its server and hybrid cloud segments revenue aided the results. However, a notable decline in both adjusted gross and operating margins limited profit growth, resulting in its adjusted EPS of $0.49 rising just 2.1% from the prior year quarter and falling short of Wall Street’s estimates. Additionally, its free cash flow took a major hit, dropping to a negative $877 million from a negative $482 million. 

Looking ahead to fiscal 2025, HPE expects revenue to grow between 7% to 11%, and projects adjusted EPS to be in the range of $1.70 to $1.90. It anticipates adjusted operating profit growth to be negative 10% to flat.

For the current fiscal year, ending in October, analysts expect HPE’s EPS to decline 12.1% year over year to $1.52. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in two of the last four quarters, while missing on two other occasions. 

Among the 15 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on six “Strong Buy,” one “Moderate Buy,” and eight “Hold” ratings. 

This configuration is slightly less bullish than two months ago, with seven analysts suggesting a “Strong Buy” rating. 

On Apr. 30, Amit Daryanani from Evercore Inc. (EVR) maintained a “Hold” rating on HPE with a price target of $17, which indicates a marginal potential upside from the current levels. 

The mean price target of $19.86 represents a 17.8% potential upside from HPE’s current price levels, while the Street-high price target of $28 suggests an ambitious upside potential of 66.1%.