Key Takeaways
- Q3 fiscal 2026 earnings announcement scheduled for September 2, following market close
- Company projects revenue between $11.5B and $12.1B, with non-GAAP EPS ranging from 88 to 93 cents
- J.P. Morgan anticipates upward revision to annual guidance, citing robust AI and traditional infrastructure momentum
- Shares have surged 126.6% in 2025, while maintaining a modest 13x forward earnings valuation
- J.P. Morgan maintains Overweight stance with $70 target price
Hewlett Packard Enterprise (HPE) will unveil its fiscal 2026 third-quarter financial performance on September 2 following the closing bell. Despite shares climbing 126.6% year-to-date, Wall Street sees continued value in the stock.
Hewlett Packard Enterprise Company, HPE
Management has established Q3 revenue expectations between $11.5 billion and $12.1 billion. Analyst consensus aligns with the upper end at $12.1 billion, implying approximately 32% year-over-year expansion.
For profitability, the company forecasts non-GAAP earnings per share between 88 and 93 cents. The Zacks consensus estimate stands marginally higher at 94 cents, representing a 113.6% jump from last year’s comparable period. This estimate has seen upward adjustments throughout the past month.
The company has exceeded Wall Street’s earnings projections for four consecutive quarters, averaging a 16% beat. This consistent outperformance provides optimism for Wednesday’s announcement.
Joseph Cardoso, analyst at J.P. Morgan, anticipates HPE will elevate its full-year revenue and profit projections. He highlighted momentum in conventional server sales, campus networking solutions, and cloud routing infrastructure as primary catalysts.
“We expect tailwinds across both AI and non-AI infrastructure to support a further raise to HPE’s revenue and earnings outlook for FY26,” Cardoso said.
Artificial intelligence infrastructure requirements represent a significant growth catalyst for the current quarter. The company has been scaling up AI inferencing capabilities, agentic AI solutions, and data-heavy workload systems, bolstered by its strategic alliance with NVIDIA.
Artificial Intelligence and Private Cloud Strategy
The company’s AI Factory and Private Cloud AI solutions, developed jointly with NVIDIA, are designed to facilitate enterprise implementations spanning data centers and edge computing locations. Strong demand for these products likely accelerated order volumes and backlog accumulation during Q3.
The acquisition of Juniper Networks remains a strategic contributor. This transaction broadened HPE’s networking capabilities across campus infrastructure, data center switching technology, routing systems, and security solutionsāall anticipated to positively impact third-quarter performance.
The GreenLake platform, HPE’s consumption-oriented IT service, enables clients to orchestrate on-site, colocation, and public cloud resources. Strategic purchases of Morpheus and OpsRamp have enhanced this platform with advanced automation and monitoring functionalities.
Attractive Valuation Metrics Persist
Even after substantial appreciation in 2025, HPE’s valuation metrics remain notably below industry benchmarks. The stock commands a forward price-to-sales ratio of 1.45x, significantly trailing the sector average of 5.26x.
With a forward earnings multiple of 13x, HPE trades at a substantial discount compared to competitors typically valued above 20x. Cardoso characterized this pricing as offering “highly digestible near-term risk-reward” for market participants.
Interestingly, HPE shares have retreated nearly 10% following the previous quarterly report, while the S&P 500 advanced approximately 1% during the identical timeframe.
J.P. Morgan maintains its Overweight recommendation alongside a $70 price objective for HPE. The firm’s Q3 consensus projects adjusted EPS of 93 cents on revenue of $11.94 billion.
During the second quarter, HPE produced substantial operating and free cash flow while maintaining shareholder returns through dividend distributions and share repurchase programs.
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