Needham & Company Reiterates Hold on Hewlett Packard Enterprise (HPE) Following 4Q
Needham & Company reiterated a Hold rating on HP Enterprise (NYSE: HPE) following the company's 4Q earnings report. HP reported revenue of $14.1 above consensus of $13.5B heading into the call but down 4% y/y. For F1Q, HP expects $0.37-0.41 in non-GAAP EPS, below consensus estimate of $0.43.
Analyst Richard Kugele commented, "Our overall opinion on HPE remains unchanged after last night’s earnings call, with a stock that already reflects an anticipated stabilization in some of its most troubled areas. There were positives and negatives worth noting from the call, however including growth in servers (large tier 1 hyperscale), upper singledigit growth in networking (excluding Aruba), and some slowing of the declines in services. Storage was mixed as high-end weakness continued but was offset by growth in 3PAR (especially AFAs). However, this growth in AFAs was also driven by aggressive pricing and we are unconvinced that pricing alone can keep that momentum. Overall, the outlook for FY16 is unchanged (albeit more backend loaded) and the stock likely range-bound at current levels."
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Shares of HP Enterprise closed at $13.69 yesterday.