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HPE, Hewlett Packard Enterprise Company

Technology Hardware consumer brand CyclicalSerial acquirer

Hewlett Packard Enterprise sells the gear that runs businesses and data centers — servers that do the computing, storage that holds the data, and the networking equipment, including its Aruba line, that ties them together. The customers are companies, governments, and the operators of large data centers. It earns money selling the hardware, and increasingly by wrapping software around it and renting the whole thing as a subscription rather than a one-time sale.

We enable our customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future.

Hewlett and David Packard, and we strive every day to uphold and enhance that legacy through our dedication to providing innovative technological solutions to our customers.

Latest annual: FY2025 10-K

HPE · Hewlett Packard Enterprise Company

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$34.3B

+13.8% YoY · 5% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $38.8B 5-yr avg $30.0B

Gross margin 64%

Operating margin 3.8% 5-yr avg 4.0%

ROIC 3% 5-yr avg 3%

Owner-earnings margin 10% 5-yr avg 6%

Free cash flow margin 10% 5-yr avg 6%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is led by Server (51%) and Networking (20%), with 3 more segments behind.
Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power. Serial acquirer. Goodwill and acquired intangibles are 40% of assets, with meaningful acquisition spending in 5 of the record's 10 years; much of what this business is was bought, at prices the record carries.
What moves the needle: The question is whether enterprise infrastructure is a franchise or a commodity: servers and storage are built from standardized parts a rival can assemble too, so the test is pricing power — whether the software bundled on top, the networking position, and the cost of replacing equipment that already runs a customer's operations let HPE hold its spread, or whether each refresh is a fresh bidding war on price. The deliberate effort is to shift the relationship from one-time hardware sales toward recurring, subscription revenue a rival cannot dislodge as easily; the lever to weigh is whether that base earns a better margin and stickier customers, or merely re-prices the same boxes. Against it sits a capital-heavy business that leans on contract manufacturers and a limited set of suppliers. The margins, returns on capital, and balance sheet in the record below show how the contest stands.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 3%, above 15% in 0 of 9 years). By owner earnings: roughly 5% of revenue reaches owners as cash, though it swings. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 5 segments, the largest Server at 51%.

Revenue by reportable segment, FY2025

Server51%$17.6B
Networking20%$6.8B
Hybrid Cloud16%$5.5B
Financial Services10%$3.5B
Corporate Investments and Other2%$769M

By geographyUnited States39%EMEA34%Asia Pacific and Japan20%Americas excluding U.S.7%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMApr 2026
											Income statement
$30.3B	$28.9B	$30.9B	$29.1B	$27.0B	$27.8B	$28.5B	$29.1B	$30.1B	$34.3B	$38.8B	RevenueRevenue
57%	56%	54%	—	—	—	—	—	—	—	64%	Gross marginGross mgn
18%	17%	16%	17%	17%	18%	17%	18%	16%	17%	17%	SG&A / revenueSG&A/rev
6%	5%	5%	6%	7%	7%	7%	8%	7%	7%	8%	R&D / revenueR&D/rev
$3.9B	$564M	$1.7B	$1.3B	($329M)	$1.1B	$782M	$2.1B	$2.2B	($437M)	$1.5B	Operating incomeOp. inc.
12.9%	2.0%	5.6%	4.4%	−1.2%	4.1%	2.7%	7.2%	7.3%	−1.3%	3.8%	Operating marginOp. mgn
$3.2B	$344M	$1.9B	$1.0B	($322M)	$3.4B	$868M	$2.0B	$2.6B	$57M	$1.6B	Net incomeNet inc.
16%	—	—	32%	—	4%	1%	9%	13%	—	—	Effective tax rateTax rate
											Cash flow & returns
$5.1B	$1.3B	$3.0B	$4.0B	$2.2B	$5.9B	$4.6B	$4.4B	$4.3B	$2.9B	$6.4B	Operating cash flowOp. cash
$3.8B	$3.1B	$2.6B	$2.5B	$2.6B	$2.6B	$2.5B	$2.6B	$2.6B	$2.7B	$3.3B	DepreciationDeprec.
($2.4B)	($2.5B)	($1.8B)	$145M	($337M)	($535M)	$854M	($641M)	($1.2B)	($518M)	$682M	Working capital & otherWC & other
$3.3B	$3.1B	$3.0B	$2.9B	$2.4B	$2.5B	$3.1B	$2.8B	$2.4B	$2.3B	$2.4B	CapexCapex
10.8%	10.9%	9.6%	9.8%	8.8%	9.0%	11.0%	9.7%	7.9%	6.7%	6.1%	Capex / revenueCapex/rev
$1.8B	($1.8B)	$8M	$1.1B	($143M)	$3.4B	$1.5B	$1.6B	$2.0B	$627M	$4.0B	Owner earningsOwner earn.
5.9%	−6.2%	0.0%	3.9%	−0.5%	12.1%	5.2%	5.5%	6.6%	1.8%	10.3%	Owner earnings marginOE mgn
$1.8B	($1.8B)	$8M	$1.1B	($143M)	$3.4B	$1.5B	$1.6B	$2.0B	$627M	$4.0B	Free cash flowFCF
5.9%	−6.2%	0.0%	3.9%	−0.5%	12.1%	5.2%	5.5%	6.6%	1.8%	10.3%	Free cash flow marginFCF mgn
$22M	$2.2B	$207M	$1.5B	$866M	$505M	$0	$761M	$147M	$12.3B	$12.3B	AcquisitionsAcquis.
$373M	$428M	$570M	$608M	$618M	$625M	$621M	$619M	$676M	$684M	$721M	Dividends paidDiv. paid
$2.7B	$2.6B	$3.6B	$2.2B	$355M	$213M	$512M	$421M	$150M	$202M	—	BuybacksBuybacks
10%	2%	—	3%	-1%	3%	2%	6%	6%	-1%	3%	ROICROIC
10%	1%	9%	6%	-2%	17%	4%	10%	10%	0%	6%	Return on equityROE
9%	−0%	6%	3%	−6%	14%	1%	7%	8%	−3%	3%	Retained to equityRetained/eq
											Balance sheet
$13.0B	$9.6B	$4.9B	$3.8B	$4.2B	$4.0B	$4.2B	$4.3B	$14.8B	$5.8B	$5.3B	Cash & investmentsCash+inv
$3.2B	$3.1B	$3.3B	$3.0B	$3.4B	$4.0B	$4.1B	$3.5B	$3.5B	$5.3B	$6.3B	ReceivablesReceiv.
$1.7B	$2.3B	$2.4B	$2.4B	$2.7B	$4.5B	$5.2B	$4.6B	$7.8B	$6.4B	$9.0B	InventoryInvent.
$4.9B	$6.1B	$6.1B	$5.6B	$5.4B	$7.0B	$8.7B	$7.1B	$11.1B	$7.7B	$11.3B	Accounts payablePayables
($74M)	($684M)	($382M)	($251M)	$677M	$1.5B	$545M	$952M	$296M	$3.9B	$4.0B	Operating working capitalOper. WC
$28.9B	$21.4B	$17.3B	$15.1B	$16.6B	$18.9B	$20.5B	$18.9B	$33.5B	$25.0B	$29.4B	Current assetsCur. assets
$22.5B	$18.9B	$17.2B	$19.2B	$18.7B	$20.7B	$23.2B	$21.9B	$26.0B	$24.6B	$27.0B	Current liabilitiesCur. liab.
1.3×	1.1×	1.0×	0.8×	0.9×	0.9×	0.9×	0.9×	1.3×	1.0×	1.1×	Current ratioCurr. ratio
$16.1B	$17.5B	$17.5B	$18.3B	$18.0B	$18.3B	$17.4B	$18.0B	$18.1B	$23.8B	$23.8B	GoodwillGoodwill
$79.6B	$61.4B	$55.5B	$51.8B	$54.0B	$57.7B	$57.1B	$57.2B	$71.3B	$75.9B	$79.5B	Total assetsAssets
$15.7B	$14.0B	$12.1B	$13.8B	$17.6B	$15.1B	$15.8B	$15.7B	$21.6B	$25.5B	$22.4B	Total debtDebt
$2.7B	$4.4B	$7.2B	$10.0B	$13.3B	$11.1B	$11.7B	$11.4B	$6.8B	$19.8B	$17.1B	Net debt / (cash)Net debt
7.1×	0.9×	2.8×	2.1×	-0.5×	2.3×	1.7×	2.9×	2.8×	-0.4×	1.3×	Interest coverageInt. cov.
$31.4B	$23.5B	$21.2B	$17.1B	$16.0B	$20.0B	$19.9B	$21.2B	$24.8B	$24.7B	$25.3B	Shareholders’ equityEquity
1.8%	1.5%	0.9%	0.9%	1.0%	1.4%	1.4%	1.5%	1.4%	1.9%	2.1%	Stock comp / revenueSBC/rev
—	—	$88M	—	$865M	—	$905M	—	—	$1.6B	$217M	Goodwill written downGW imp.
											Per share
1.74B	1.67B	1.55B	1.37B	1.29B	1.33B	1.32B	1.32B	1.34B	1.32B	1.36B	Shares out (diluted)Shares
$17.41	$17.25	$19.87	$21.33	$20.85	$20.89	$21.56	$22.14	$22.53	$25.90	$28.61	Revenue / shareRev/sh
$1.82	$0.21	$1.23	$0.77	$-0.25	$2.58	$0.66	$1.54	$1.93	$0.04	$1.15	EPS (diluted)EPS
$1.02	$-1.08	$0.01	$0.84	$-0.11	$2.53	$1.11	$1.22	$1.48	$0.47	$2.94	Owner earnings / shareOE/sh
$1.02	$-1.08	$0.01	$0.84	$-0.11	$2.53	$1.11	$1.22	$1.48	$0.47	$2.94	Free cash flow / shareFCF/sh
$0.21	$0.26	$0.37	$0.45	$0.48	$0.47	$0.47	$0.47	$0.51	$0.52	$0.53	Dividends / shareDiv/sh
$1.89	$1.87	$1.90	$2.09	$1.84	$1.88	$2.36	$2.15	$1.77	$1.73	$1.75	Cap. spending / shareCapex/sh
$18.08	$14.02	$13.68	$12.52	$12.40	$15.02	$15.03	$16.10	$18.56	$18.65	$18.65	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+4.5%/yr	+4.4%/yr
Owner earnings / share	−8.2%/yr	—
EPS	−34.0%/yr	—
Dividends / share	+10.3%/yr	+1.6%/yr
Capital spending / share	−0.9%/yr	−1.2%/yr
Book value / share	+0.3%/yr	+8.5%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

1.3Bpeak FY2016

ROIC

−1%low FY2020

Gross margin

54%low FY2018

Net debt ÷ owner earnings

31.5×peak FY2018

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$627Mowner earningsvs.$57Mnet incomelow FY2017

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $57M of profit into $627M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$57M

Owner earnings$627M · 2% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$57M	$2.6B	$2.0B	$868M	$3.4B
Depreciation & amortizationnon-cash charge added back	+$2.7B	+$2.6B	+$2.6B	+$2.5B	+$2.6B
Stock-based compensationreal costnon-cash, but a real cost	+$643M	+$430M	+$428M	+$391M	+$382M
Working capital & othertiming of cash in and out, other non-cash items	−$518M	−$1.2B	−$641M	+$854M	−$535M
Cash from operations	$2.9B	$4.3B	$4.4B	$4.6B	$5.9B
Capital expenditurecash put back in to keep running and to grow	−$2.3B	−$2.4B	−$2.8B	−$3.1B	−$2.5B
Owner earnings	$627M	$2.0B	$1.6B	$1.5B	$3.4B
Owner-earnings marginowner earnings ÷ revenue	2%	7%	5%	5%	12%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $643M), owner earnings is nearer ($16M).

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -0.4×

Does not cover its interest

Operating income ($437M) ÷ interest expense $1.1B

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $19.8B

Net debt against an operating loss

Cash $5.8B − debt $25.5B

What this means
Netting $5.8B of cash and short-term investments against $25.5B of debt leaves $19.8B owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 21d

Tight

DSO 56 + DIO 165 − DPO 200 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 3%

Below average through the cycle

9-yr median, range -1%–10%; -1% latest = NOPAT ($345M) ÷ invested capital $44.5B

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran -1% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 2%

Thin, recently turned positive

latest $627M = operating cash $2.9B − maintenance capex $2.3B; positive each of the last 3 years, after an earlier loss stretch (10-yr median 4%)

Industry peers: median 7%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 2% of revenue this year, a 4% median across 10 years. Treating stock comp as the real expense it is (less $643M of SBC) leaves ($16M).
Are earnings backed by cash? 51.21×

Cash-backed

Cash from ops $2.9B ÷ net income $57M

In the filing’s words The filing leans on adjusted, non-GAAP earnings, but the GAAP profit is itself cash-backed — the adjustments are not papering over a cash shortfall here.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 141%

Returned more than it generated

Dividends + buybacks $886M ÷ Owner Earnings $627M

What this means
The company returned more than it generated: against $627M of Owner Earnings, $886M (141%) went back to shareholders, $684M dividends, $202M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. But the buybacks barely exceed stock issued to employees ($643M SBC), net of dilution, little was truly returned. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.84×

Maintaining

Capex $2.3B ÷ depreciation $2.7B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $34.3B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.01×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $25.5B vs $351M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (10-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −14%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.17/share (latest year $0.04), the averaged base the calculator's gate runs on, and book value is $18.64/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 10

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 7% → 4% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices but names price competition too — and the margin slipped, so the pressure is winning here.

What this means
Through the cycle the operating margin slipped — about 7% early to 4% lately, median 4% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2025 · −1.3% op. margin

What this means
Operations went underwater in 2025, understand why before trusting the good years.
Share count −3.0%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Sales of AI systems to such customers have caused, and may continue to cause, fluctuations in our results of operations, as such large orders may occur in some periods and not others and are generally subject to intense competition and pricing pressure, which can have an impact on our margins and results of operations.…”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$29.4B

Cash & short-term investments$5.3B
Receivables$6.3B
Inventory$9.0B
Other current assets$8.7B

Current liabilities$27.0B

Debt due within a year$2.2B
Accounts payable$11.3B
Other current liabilities$13.4B

Current ratio1.09×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.75×stricter: inventory excluded

Cash ratio0.20×strictest: cash alone against what's due

Working capital$2.4Bthe cushion left after near-term bills

Debt due this year vs. cash$2.2B due · $5.3B cash covered by cash on hand, no refinancing forced · both figures from the Apr 30, 2026 balance sheet

Revenue, latest quarter vs. a year ago+40.0%the freshest read on whether the business is still growing

Current ratio, recent quarters0.9× → 1.1×

Deeper floors

Tangible book value($4.4B)equity stripped of goodwill & intangibles

Net current asset value$15.1BGraham's net-net: current assets less all liabilities

Debt incl. operating leases$22.2B$1.7B of it operating leases

Deferred revenue$10.6Bcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $37.7B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$27.7B · 73%
Dividends$5.8B · 15%
Buybacks$12.9B · 34%

Returned to owners$18.7B
187% of the owner earnings the business produced over the span, $5.8B as dividends and $12.9B as buybacks.
Source of funding−$8.7B
Reinvestment and shareholder returns ran $8.7B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $15.7B to $22.4B, and cash and short-term investments drew down $7.7B.
Average price paid for buybacks—
Buybacks ran $12.9B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−22.0%
The diluted count fell from 1739M to 1356M, so the buybacks outran the stock issued to staff.
Dividend record$0.52/sh
Paid in 10 of the years on record, the per-share dividend growing about 10% a year. It was never cut over the span.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$30.1B40% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity96%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$18.5Bover 10 years buying other businesses, against $27.7B of capital spent building

$3.4B written down across 4 years (2018, 2020, 2022, 2025): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 19% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Neri	$19.1M	$31.3M	$3.4B
2022	Mr. Neri	$17.4M	$12.3M	$1.5B
2023	Mr. Neri	$20.1M	$27.2M	$1.6B
2024	Mr. Neri	$21.4M	$24.0M	$2.0B
2025	Mr. Neri	$23.5M	$30.7M	$627M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio316:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$643M
The slice of the business handed to employees in shares this year, 2% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Hewlett Packard Enterprise Company is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 6 tests turned up something to look into; the other 4 came back clean.

Look hereDid debt outgrow the business?$15.7B → $22.4B
Debt rose from $15.7B to $22.4B while owner earnings went from about ($6M) to $1.4B: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereDid receivables and inventory outpace sales?16% → 39% of sales
Receivables and inventory grew from $4.9B to $15.3B while revenue grew 28%: working capital is climbing faster than sales (16% of revenue then, 39% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Technology Hardware

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
DELLDell Technologies Inc.	$113.5B	23%	4.4%	18%	7%
IBMInternational Business Machines Corp	$67.5B	55%	15.2%	13%	18%
CSCOCisco Systems Inc. Common Stock (DE)	$56.7B	63%	25.7%	21%	26%
HPQHP Inc.	$55.3B	19%	6.6%	64%	6%
HPEHewlett Packard Enterprise Company	$34.3B	56%	4.2%	3%	5%
SMCISuper Micro Computer Inc.	$22.0B	15%	4.3%	12%	2%
WDCWestern Digital Corporation	$9.5B	28%	7.2%	6%	4%
PANWPalo Alto Networks Inc.	$9.2B	72%	-4.0%	-10%	38%
Group median	—	41%	5.5%	12%	7%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Hewlett Packard Enterprise Company has delivered.

Today’s price $

Through the cycle, Hewlett Packard Enterprise Company earns about $1.6B on its 4.5% median owner-earnings margin. This year’s 1.8% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.6B) Net of stock comp (−$807M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−14%/yr

Owner-earnings growth · since FY2021−34%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $4.0B on 1324M shares outstanding, per the 10-Q cover, as of 2026-05-26; net debt $17.1B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh HPE against another business →

The owners of HPE: the meeting and the votes →

Cite: Owner Scorecard, "Hewlett Packard Enterprise Company (HPE), the owner's record," https://ownerscorecard.com/c/HPE, data as of 2026-07-09.

Manual order: ← HP its page in the Manual HPK →

Industry order: ← FTNT the Technology Hardware chapter HPQ →