Intrinsic value of Hewlett Packard Enterprise Company - HPE

Previous Close

$14.15

  Intrinsic Value

$33.76

stock screener

  Rating & Target

str. buy

+139%

Previous close

$14.15

 
Intrinsic value

$33.76

 
Up/down potential

+139%

 
Rating

str. buy

We calculate the intrinsic value of HPE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 19.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  31,469
  32,193
  33,020
  33,949
  34,978
  36,108
  37,337
  38,668
  40,102
  41,641
  43,288
  45,045
  46,915
  48,903
  51,013
  53,249
  55,615
  58,117
  60,762
  63,553
  66,499
  69,606
  72,881
  76,331
  79,965
  83,791
  87,818
  92,056
  96,514
  101,203
Variable operating expenses, $m
  11,638
  11,864
  12,122
  12,411
  12,732
  13,084
  13,467
  13,882
  14,329
  14,808
  13,489
  14,036
  14,619
  15,238
  15,896
  16,592
  17,330
  18,109
  18,933
  19,803
  20,721
  21,689
  22,710
  23,785
  24,917
  26,109
  27,364
  28,685
  30,074
  31,535
Fixed operating expenses, $m
  18,037
  18,434
  18,840
  19,254
  19,678
  20,111
  20,553
  21,005
  21,467
  21,940
  22,422
  22,916
  23,420
  23,935
  24,462
  25,000
  25,550
  26,112
  26,686
  27,273
  27,873
  28,487
  29,113
  29,754
  30,408
  31,077
  31,761
  32,460
  33,174
  33,904
Total operating expenses, $m
  29,675
  30,298
  30,962
  31,665
  32,410
  33,195
  34,020
  34,887
  35,796
  36,748
  35,911
  36,952
  38,039
  39,173
  40,358
  41,592
  42,880
  44,221
  45,619
  47,076
  48,594
  50,176
  51,823
  53,539
  55,325
  57,186
  59,125
  61,145
  63,248
  65,439
Operating income, $m
  1,793
  1,895
  2,059
  2,284
  2,569
  2,913
  3,317
  3,781
  4,307
  4,894
  7,377
  8,093
  8,877
  9,730
  10,656
  11,657
  12,736
  13,896
  15,142
  16,477
  17,905
  19,430
  21,058
  22,792
  24,639
  26,604
  28,693
  30,911
  33,266
  35,765
EBITDA, $m
  5,265
  5,404
  5,611
  5,885
  6,223
  6,626
  7,095
  7,628
  8,228
  8,895
  9,632
  10,439
  11,320
  12,277
  13,313
  14,430
  15,632
  16,923
  18,307
  19,787
  21,368
  23,056
  24,854
  26,768
  28,804
  30,968
  33,267
  35,706
  38,293
  41,036
Interest expense (income), $m
  415
  656
  692
  735
  785
  840
  902
  970
  1,043
  1,123
  1,209
  1,301
  1,400
  1,505
  1,617
  1,736
  1,863
  1,997
  2,139
  2,289
  2,447
  2,614
  2,791
  2,977
  3,173
  3,380
  3,598
  3,827
  4,068
  4,322
  4,589
Earnings before tax, $m
  1,138
  1,203
  1,324
  1,499
  1,728
  2,011
  2,348
  2,738
  3,183
  3,685
  6,076
  6,693
  7,372
  8,113
  8,919
  9,794
  10,739
  11,758
  12,853
  14,030
  15,290
  16,639
  18,081
  19,619
  21,259
  23,007
  24,866
  26,843
  28,944
  31,175
Tax expense, $m
  307
  325
  357
  405
  467
  543
  634
  739
  860
  995
  1,640
  1,807
  1,990
  2,190
  2,408
  2,644
  2,899
  3,175
  3,470
  3,788
  4,128
  4,493
  4,882
  5,297
  5,740
  6,212
  6,714
  7,248
  7,815
  8,417
Net income, $m
  831
  878
  966
  1,094
  1,262
  1,468
  1,714
  1,999
  2,324
  2,690
  4,435
  4,886
  5,381
  5,922
  6,511
  7,149
  7,839
  8,583
  9,383
  10,242
  11,162
  12,147
  13,199
  14,322
  15,519
  16,795
  18,152
  19,595
  21,129
  22,758

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  56,599
  57,901
  59,389
  61,059
  62,911
  64,942
  67,153
  69,547
  72,127
  74,895
  77,856
  81,016
  84,380
  87,956
  91,750
  95,771
  100,027
  104,528
  109,283
  114,305
  119,603
  125,191
  131,080
  137,286
  143,822
  150,703
  157,946
  165,568
  173,586
  182,020
Adjusted assets (=assets-cash), $m
  56,599
  57,901
  59,389
  61,059
  62,911
  64,942
  67,153
  69,547
  72,127
  74,895
  77,856
  81,016
  84,380
  87,956
  91,750
  95,771
  100,027
  104,528
  109,283
  114,305
  119,603
  125,191
  131,080
  137,286
  143,822
  150,703
  157,946
  165,568
  173,586
  182,020
Revenue / Adjusted assets
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
  0.556
Average production assets, $m
  15,735
  16,096
  16,510
  16,975
  17,489
  18,054
  18,669
  19,334
  20,051
  20,821
  21,644
  22,522
  23,458
  24,452
  25,506
  26,624
  27,807
  29,059
  30,381
  31,777
  33,250
  34,803
  36,440
  38,165
  39,982
  41,895
  43,909
  46,028
  48,257
  50,602
Working capital, $m
  -2,864
  -2,930
  -3,005
  -3,089
  -3,183
  -3,286
  -3,398
  -3,519
  -3,649
  -3,789
  -3,939
  -4,099
  -4,269
  -4,450
  -4,642
  -4,846
  -5,061
  -5,289
  -5,529
  -5,783
  -6,051
  -6,334
  -6,632
  -6,946
  -7,277
  -7,625
  -7,991
  -8,377
  -8,783
  -9,209
Total debt, $m
  12,809
  13,612
  14,530
  15,561
  16,703
  17,956
  19,321
  20,798
  22,389
  24,097
  25,924
  27,874
  29,950
  32,156
  34,497
  36,978
  39,604
  42,381
  45,315
  48,413
  51,682
  55,130
  58,764
  62,592
  66,625
  70,871
  75,340
  80,042
  84,990
  90,193
Total liabilities, $m
  34,922
  35,725
  36,643
  37,674
  38,816
  40,069
  41,434
  42,911
  44,502
  46,210
  48,037
  49,987
  52,063
  54,269
  56,610
  59,091
  61,717
  64,494
  67,428
  70,526
  73,795
  77,243
  80,877
  84,705
  88,738
  92,984
  97,453
  102,155
  107,103
  112,306
Total equity, $m
  21,677
  22,176
  22,746
  23,386
  24,095
  24,873
  25,720
  26,637
  27,625
  28,685
  29,819
  31,029
  32,318
  33,687
  35,140
  36,680
  38,310
  40,034
  41,856
  43,779
  45,808
  47,948
  50,204
  52,580
  55,084
  57,719
  60,493
  63,412
  66,483
  69,714
Total liabilities and equity, $m
  56,599
  57,901
  59,389
  61,060
  62,911
  64,942
  67,154
  69,548
  72,127
  74,895
  77,856
  81,016
  84,381
  87,956
  91,750
  95,771
  100,027
  104,528
  109,284
  114,305
  119,603
  125,191
  131,081
  137,285
  143,822
  150,703
  157,946
  165,567
  173,586
  182,020
Debt-to-equity ratio
  0.590
  0.610
  0.640
  0.670
  0.690
  0.720
  0.750
  0.780
  0.810
  0.840
  0.870
  0.900
  0.930
  0.950
  0.980
  1.010
  1.030
  1.060
  1.080
  1.110
  1.130
  1.150
  1.170
  1.190
  1.210
  1.230
  1.250
  1.260
  1.280
  1.290
Adjusted equity ratio
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  831
  878
  966
  1,094
  1,262
  1,468
  1,714
  1,999
  2,324
  2,690
  4,435
  4,886
  5,381
  5,922
  6,511
  7,149
  7,839
  8,583
  9,383
  10,242
  11,162
  12,147
  13,199
  14,322
  15,519
  16,795
  18,152
  19,595
  21,129
  22,758
Depreciation, amort., depletion, $m
  3,472
  3,509
  3,552
  3,601
  3,654
  3,713
  3,777
  3,847
  3,921
  4,001
  2,255
  2,346
  2,444
  2,547
  2,657
  2,773
  2,897
  3,027
  3,165
  3,310
  3,464
  3,625
  3,796
  3,976
  4,165
  4,364
  4,574
  4,795
  5,027
  5,271
Funds from operations, $m
  4,302
  4,388
  4,519
  4,695
  4,916
  5,181
  5,491
  5,845
  6,245
  6,691
  6,690
  7,232
  7,825
  8,469
  9,168
  9,923
  10,736
  11,610
  12,548
  13,552
  14,626
  15,772
  16,995
  18,298
  19,684
  21,159
  22,726
  24,390
  26,156
  28,029
Change in working capital, $m
  -56
  -66
  -75
  -85
  -94
  -103
  -112
  -121
  -130
  -140
  -150
  -160
  -170
  -181
  -192
  -203
  -215
  -228
  -241
  -254
  -268
  -283
  -298
  -314
  -331
  -348
  -366
  -386
  -406
  -427
Cash from operations, $m
  4,358
  4,453
  4,594
  4,780
  5,010
  5,284
  5,603
  5,967
  6,376
  6,831
  6,840
  7,392
  7,995
  8,650
  9,360
  10,126
  10,951
  11,838
  12,788
  13,806
  14,894
  16,055
  17,293
  18,612
  20,015
  21,507
  23,092
  24,776
  26,562
  28,456
Maintenance CAPEX, $m
  -1,607
  -1,639
  -1,677
  -1,720
  -1,768
  -1,822
  -1,881
  -1,945
  -2,014
  -2,089
  -2,169
  -2,255
  -2,346
  -2,444
  -2,547
  -2,657
  -2,773
  -2,897
  -3,027
  -3,165
  -3,310
  -3,464
  -3,625
  -3,796
  -3,976
  -4,165
  -4,364
  -4,574
  -4,795
  -5,027
New CAPEX, $m
  -310
  -362
  -414
  -464
  -515
  -565
  -615
  -666
  -717
  -770
  -823
  -878
  -935
  -994
  -1,055
  -1,118
  -1,183
  -1,251
  -1,322
  -1,396
  -1,473
  -1,553
  -1,637
  -1,725
  -1,817
  -1,913
  -2,014
  -2,119
  -2,229
  -2,345
Cash from investing activities, $m
  -1,917
  -2,001
  -2,091
  -2,184
  -2,283
  -2,387
  -2,496
  -2,611
  -2,731
  -2,859
  -2,992
  -3,133
  -3,281
  -3,438
  -3,602
  -3,775
  -3,956
  -4,148
  -4,349
  -4,561
  -4,783
  -5,017
  -5,262
  -5,521
  -5,793
  -6,078
  -6,378
  -6,693
  -7,024
  -7,372
Free cash flow, $m
  2,442
  2,453
  2,504
  2,595
  2,727
  2,898
  3,108
  3,356
  3,645
  3,973
  3,848
  4,259
  4,714
  5,213
  5,758
  6,352
  6,995
  7,690
  8,439
  9,245
  10,111
  11,038
  12,030
  13,091
  14,222
  15,429
  16,715
  18,083
  19,538
  21,084
Issuance/(repayment) of debt, $m
  668
  803
  918
  1,031
  1,142
  1,253
  1,365
  1,477
  1,591
  1,708
  1,827
  1,950
  2,076
  2,206
  2,341
  2,481
  2,626
  2,777
  2,934
  3,098
  3,269
  3,448
  3,634
  3,829
  4,033
  4,246
  4,469
  4,703
  4,947
  5,204
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  668
  803
  918
  1,031
  1,142
  1,253
  1,365
  1,477
  1,591
  1,708
  1,827
  1,950
  2,076
  2,206
  2,341
  2,481
  2,626
  2,777
  2,934
  3,098
  3,269
  3,448
  3,634
  3,829
  4,033
  4,246
  4,469
  4,703
  4,947
  5,204
Total cash flow (excl. dividends), $m
  3,109
  3,256
  3,422
  3,626
  3,869
  4,151
  4,472
  4,834
  5,236
  5,681
  5,675
  6,209
  6,789
  7,419
  8,099
  8,832
  9,621
  10,467
  11,374
  12,343
  13,380
  14,485
  15,664
  16,919
  18,255
  19,675
  21,184
  22,785
  24,485
  26,288
Retained Cash Flow (-), $m
  -438
  -499
  -570
  -640
  -709
  -778
  -847
  -917
  -988
  -1,060
  -1,134
  -1,210
  -1,289
  -1,369
  -1,453
  -1,540
  -1,630
  -1,724
  -1,821
  -1,923
  -2,029
  -2,140
  -2,256
  -2,377
  -2,503
  -2,636
  -2,774
  -2,919
  -3,071
  -3,230
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  2,671
  2,757
  2,852
  2,986
  3,160
  3,373
  3,625
  3,917
  4,248
  4,621
  4,541
  4,998
  5,501
  6,050
  6,646
  7,292
  7,991
  8,743
  9,552
  10,420
  11,350
  12,345
  13,408
  14,543
  15,752
  17,039
  18,410
  19,866
  21,414
  23,058
Discount rate, %
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
  2,553
  2,509
  2,459
  2,427
  2,408
  2,395
  2,385
  2,371
  2,351
  2,319
  2,051
  2,014
  1,960
  1,888
  1,798
  1,691
  1,571
  1,439
  1,299
  1,155
  1,011
  870
  735
  610
  496
  395
  308
  235
  175
  127
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Hewlett Packard Enterprise Company is a provider of technology solutions. The Company’s segments include: Enterprise Group, Software, Financial Services and Corporate Investments. The Enterprise Group segment provides its customers with the technology infrastructure they need to optimize traditional information technology (IT). The Software segment allows its customers to automate IT operations to simplify, accelerate and secure business processes and drives the analytics that turn raw data into actionable knowledge. The Financial Services segment enables flexible IT consumption models, financial architectures and customized investment solutions for its customers. The Corporate Investments segment includes Hewlett Packard Labs and certain business incubation projects, among others.

FINANCIAL RATIOS  of  Hewlett Packard Enterprise Company (HPE)

Valuation Ratios
P/E Ratio 65.6
Price to Sales 0.8
Price to Book 1
Price to Tangible Book
Price to Cash Flow 25.4
Price to Free Cash Flow -10
Growth Rates
Sales Growth Rate -4.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -4.4%
Cap. Spend. - 3 Yr. Gr. Rate -2.8%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 43.4%
Total Debt to Equity 59.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital 0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 4.3%
Return On Equity 1.3%
Return On Equity - 3 Yr. Avg. 6%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 30.1%
Gross Margin - 3 Yr. Avg. 31.6%
EBITDA Margin 12.9%
EBITDA Margin - 3 Yr. Avg. 20%
Operating Margin 2.2%
Oper. Margin - 3 Yr. Avg. 7.5%
Pre-Tax Margin 0.9%
Pre-Tax Margin - 3 Yr. Avg. 6.6%
Net Profit Margin 1.2%
Net Profit Margin - 3 Yr. Avg. 6.5%
Effective Tax Rate -60.3%
Eff/ Tax Rate - 3 Yr. Avg. -26.9%
Payout Ratio 124.4%

HPE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HPE stock intrinsic value calculation we used $30852 million for the last fiscal year's total revenue generated by Hewlett Packard Enterprise Company. The default revenue input number comes from 0001 income statement of Hewlett Packard Enterprise Company. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HPE stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.6%, whose default value for HPE is calculated based on our internal credit rating of Hewlett Packard Enterprise Company, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Hewlett Packard Enterprise Company.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HPE stock the variable cost ratio is equal to 37.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $17649 million in the base year in the intrinsic value calculation for HPE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Hewlett Packard Enterprise Company.

Corporate tax rate of 27% is the nominal tax rate for Hewlett Packard Enterprise Company. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HPE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HPE are equal to 50%.

Life of production assets of 9.6 years is the average useful life of capital assets used in Hewlett Packard Enterprise Company operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HPE is equal to -9.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $21239 million for Hewlett Packard Enterprise Company - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1370.255 million for Hewlett Packard Enterprise Company is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Hewlett Packard Enterprise Company at the current share price and the inputted number of shares is $19.4 billion.

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