Stock Analysis | Hewlett Packard Outlook - Mixed Signals as Technicals Turn Weak

Market Snapshot: Price Rises Despite Technical Headwinds

Headline takeaway: Hewlett Packard (HPE) is currently in a price-up phase (4.77%), but internal diagnostic scores from our technical model suggest investors should exercise caution, as the stock has more bearish signals than bullish ones.

News Highlights

Recent industry coverage has focused heavily on Apple and its peers in the technology hardware and peripherals space. These comparisons are likely influencing broader market sentiment, though HPE isn’t the focus in these reports. For example:

• On May 30, 2025, multiple analyses compared Apple’s financials with its rivals, highlighting competitive pressures in the sector. While HPE wasn't directly referenced, these pieces suggest a broader reevaluation of hardware stocks.
• Also on May 30, news on energy transition plans in the U.S. showed potential policy shifts, which might affect supply chain dynamics for companies like HPE.
• On May 28, a Best Buy earnings cut due to tariff concerns was reported, indicating macroeconomic headwinds that could spill over to HPE’s business.

Analyst Views & Fundamentals

Analysts have shown a generally optimistic tone, with eight institutions weighing in over the past 20 days. The simple average rating is 3.88, while the performance-weighted average is 4.54. This suggests a moderate dispersion in sentiment, with the most recent ratings skewed slightly toward “Strong Buy” and “Buy”.

Notably, B of A Securities’ Wamsi Mohan has the highest historical accuracy at 80%, recommending a “Strong Buy.” On the other hand, Citigroup’s Asiya Merchant, with a 40% win rate, has also called for a “Strong Buy,” but with a weaker historical track record.

Now, let’s look at HPE’s fundamental picture:

• Price-to-Book (PB): 0.49 (value) – internal diagnostic score: 0
• Price-to-Sales (PS): 4.34 (value) – internal diagnostic score: 3
• ROE (diluted YoY): -2.46% (value) – internal diagnostic score: 2
• Net Income to Revenue: -11.18% (value) – internal diagnostic score: 0
• Basic Earnings per Share YoY Growth: -166.67% (value) – internal diagnostic score: 3
• CFO to Assets (CFOA): -0.68% (value) – internal diagnostic score: 3
• Current Assets / Total Assets: 46.53% (value) – internal diagnostic score: 1

Although some fundamentals like PS and CFOA show some relative strength, the sharp drop in earnings and ROE signals underlying pressure. The internal diagnostic fundamental score is 6.28, suggesting moderate financial health but with room for concern.

Money-Flow Trends

Big-money flows are currently negative, with overall inflow ratio at 48.80%. This suggests that institutional and large-cap money is not building positions in HPE. By size, the largest and extra-large money flows are both trending down, while small money flows are slightly more positive at 49.60% inflow. Retail investors may be cautiously optimistic, but institutional sentiment is bearish.

Key Technical Signals

Technically, HPE is in a weak state. Our proprietary model calculates a technical score of 3.34, advising investors to avoid the stock. Here’s a breakdown of the key indicators:

• Williams %R Overbought: internal diagnostic score: 3.04 – Indicates a neutral rise, but historically has an average return of -0.13%.
• RSI Overbought: internal diagnostic score: 1.51 – Neutral bias with a poor historical win rate (40%) and average return of -0.97%.
• Earnings Release Date: internal diagnostic score: 1.00 – Strongly bearish, with a historical average return of -2.96% and zero win rate.
• Bullish Engulfing: internal diagnostic score: 7.82 – The only strong bullish signal, but it appears in only one of the last five days.

Key Insights from Technicals:

• There are 3 bearish and 1 bullish indicators in the last five days.
• The trend is weak, with volatility and unclear direction. Investors should wait for clearer signals before entering.

Conclusion

While Hewlett Packard has shown a recent price rise of 4.77%, the technical signals suggest caution. Our internal diagnostic technical score is 3.34, which advises investors to avoid the stock. With three bearish signals and only one bullish pattern, the chart setup looks unattractive.

Fundamentally, HPE is in a moderate but shaky position, with a 6.28 internal diagnostic score. However, the recent earnings slump and weak ROE are red flags.

Actionable Takeaway: Consider waiting for a clearer pullback and watch the upcoming earnings report for potential catalysts. Until then, HPE may not be a favorable play for risk-averse investors.