Is Hewlett Packard (HPE) Stock Undervalued Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Hewlett Packard (HPE). HPE is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.27. This compares to its industry's average Forward P/E of 19.86. Over the past 52 weeks, HPE's Forward P/E has been as high as 11.40 and as low as 6.15, with a median of 9.51.

Finally, investors will want to recognize that HPE has a P/CF ratio of 7.86. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. HPE's current P/CF looks attractive when compared to its industry's average P/CF of 19.92. Within the past 12 months, HPE's P/CF has been as high as 7.86 and as low as 3.31, with a median of 5.84.

Value investors will likely look at more than just these metrics, but the above data helps show that Hewlett Packard is likely undervalued currently. And when considering the strength of its earnings outlook, HPE sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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