Hewlett-Packard Enterprise HPE shares have returned 12.8% year to date, lagging the Zacks Computer – Integrated Systems industry’s growth of 16.2%. Macroeconomic uncertainties and geopolitical issues have made the stock market highly volatile year to date, and HPE shares have not been spared.
Despite these short-term challenges, Hewlett Packard Enterprise’s long-term prospects are bright as the company continues to win customers for its products and solutions. For example, HPE Aruba Networking recently upgraded advanced secure connectivity at select Nobu Hotels locations.
Hewlett Packard Enterprise has equipped Nobu Hotels with its network infrastructure based on HPE Aruba and using zero-trust measures. The company has installed wired, wireless and artificial intelligence (AI)-based SD-WAN solutions for Nobu Hotels to enhance the guest experience and ensure constant connectivity and security.
The Aruba deployment includes the deployment of HPE Aruba Networking Central, HPE Aruba Networking ClearPass, and HPE Aruba Networking User Experience Insight. These solutions improve the connectivity of mobile, IoT devices, and AI-based applications. Customizations including door automation, security cameras, digital voice assistants, lighting, blinds, and in-room ordering will be installed. The solution will also be used to simplify the work of hospitality staff so they can better focus on customer service.
Hewlett Packard Enterprise Company Price and Consensus
Hewlett Packard Enterprise Company Price Consensus Chart | Hewlett Packard Enterprise Company Quote
Aruba’s robust features support HPE
The increasing adoption of Aruba Networking by organizations worldwide is due to the continuous improvements HPE makes to improve the solution’s performance. So far this year, HPE has added two new features to Aruba Networking.
Hewlett Packard Enterprise has added GenAI LLM models to HPE Aruba Networking Central’s search functionality to improve its accuracy. The company also launched HPE Aruba Networking Enterprise Private 5G, making HPE the world’s first company to offer Wi-Fi and private 5G solutions simultaneously.
In addition, the acquisition of Juniper Networks JNPR is poised to strengthen HPE’s networking portfolio and enable the company to offer comprehensive solutions that integrate networking, security and cloud services.
These enhancements to Aruba Networking capabilities will help Hewlett Packard Enterprise attract new customers. This year, HPE has already won several customers using the Aruba Networking solution, including Berger Paints, Nice (Brazil), the City of Carmel, Royal Jaarbeurs, Houston Airports, Bethesda Health Group, University of Maryland and Dedini S/A Indústrias de Base.
HPE increases the competitiveness of Aruba Networking
By continually improving Aruba Networking’s capabilities, Hewlett Packard Enterprise has gained a competitive advantage in edge networking over its long-time competitor. Cisco CSCO in the network market.
Cisco is a networking company that focuses more on the security aspects of networking and AI. HPE has now combined Wi-Fi, compute, storage, SaaS and its financial services to provide the most comprehensive cloud architecture advantage.
Hewlett Packard Enterprise’s other strong competitor in the networking sector is Dell Technologies DELL. Although both companies target enterprise customers, the approach to installing network architecture is different for both.
While Dell’s architecture is based on open networking that focuses on separating hardware and operating system, HPE’s is based on zero-trust security, wireless edge-to-cloud, and unified infrastructure. The two different approaches to networking give customers the ability to choose networking according to their architecture while increasing competition in this space.
The pending acquisition of Juniper Networks is in line with Hewlett Packard Enterprise’s goal to expand its presence in the enterprise networking space. Juniper Networks’ advanced network infrastructure technologies, combined with HPE’s existing capabilities, are expected to create a strong synergy, enabling HPE to offer more robust and secure networking options and increase its competitiveness in the market.
HPE’s mixed forecast for the third quarter
Hewlett Packard forecasts revenue in the range of $7.4 billion to $7.8 billion for the third quarter of fiscal 2024. The Zacks Consensus Estimate for revenue is $7.64 billion, representing year-over-year growth of 9.1%.
The company expects non-GAAP net earnings per share in the range of 43 cents to 48 cents. The Zacks Consensus Estimate for earnings is 46 cents, a decrease of 6.1% from the prior year.
What investors should do with HPE shares
Hewlett Packard Enterprise’s efforts to strengthen its market position and expand its networking capabilities should lead to sustainable performance improvements over the long term. In addition, the Value Score of A reflects that the stock is currently relatively cheap.
However, lower IT spending due to macroeconomic headwinds and increasing competition could impact the company’s near-term growth prospects.
HPE stock currently has a Zacks Rank #3 (Hold), which suggests that it may be wise to wait for a more favorable entry point into the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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