Hewlett Packard Enterprise's fiscal 2024 earnings guidance disappointed Wall Street analysts. HPE stock fell Friday, dipping into the red for this year.
The maker of computer servers, networking equipment and data storage systems hosted an investor day on Thursday.
The fiscal 2024 year for HPE stock starts with the quarter ending in January. The company predicted sales growth in a range of 2% to 4%, slightly above consensus estimates.
But the company said it expects earnings per share of $1.92, missing estimates of $2.10. HPE said it expects operating profit in a range of 3% to 5% and free cash flow of $2 billion at the midpoint of guidance.
HPE Stock: Long-Range Outlook
"Lower-than-expected EPS and FCF guidance for fiscal 2024 suggests various growth initiatives are taking longer to materialize," said Barclay's analyst Tim Long in a report.
At Raymond James, analysts Simon Leopold said in a report: "The fiscal 2023-2026 CAGR (compound annual growth rate) for 2% to 4% revenue growth is reasonable considering that HPE had been viewed as a 'no growth' story."
On the stock market today, HPE stock fell 6.6% to close at 15.23. In addition, HPE stock has retreated from a 52-week high of 18.14 set on Aug. 8.
HPE in May sold off its stake in H3C, a Chinese joint venture, for $3.5 billion.
At UBS, analyst David Vogt said in a report: "While we are not surprised by the muted revenue outlook, the decision to exclude the contribution from H3C and adjust for one time items in 2023 including hedging and venture gains, although disappointing for bullish investors, is a prudent reset of HP's earnings power in our view."
The tech stock holds a Relative Strength Rating of 84 out of a best-possible 99, according to IBD Stock Checkup.
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