Price to Operating Profit (P/OP)
since 2015
Calculation
Hewlett Packard Enterprise Co., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Earnings (loss) from operations1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 22, 2023 | 10.64 | = | 17.09 | ÷ | 1.61 | 1.61 | = | 2,089 | ÷ | 1,300,000,000 | |
| Dec 8, 2022 | 26.70 | = | 16.29 | ÷ | 0.61 | 0.61 | = | 782 | ÷ | 1,281,816,851 | |
| Dec 10, 2021 | 17.38 | = | 15.21 | ÷ | 0.88 | 0.88 | = | 1,132 | ÷ | 1,293,439,907 | |
| Dec 10, 2020 | — | = | 12.12 | ÷ | -0.25 | -0.25 | = | -329 | ÷ | 1,293,499,810 | |
| Dec 13, 2019 | 16.27 | = | 16.03 | ÷ | 0.99 | 0.99 | = | 1,274 | ÷ | 1,292,925,893 | |
| Dec 12, 2018 | 11.02 | = | 14.64 | ÷ | 1.33 | 1.33 | = | 1,858 | ÷ | 1,398,678,425 | |
| Dec 15, 2017 | 36.75 | = | 14.41 | ÷ | 0.39 | 0.39 | = | 625 | ÷ | 1,593,885,581 | |
| Dec 15, 2016 | 9.52 | = | 23.73 | ÷ | 2.49 | 2.49 | = | 4,150 | ÷ | 1,664,817,197 | |
| Dec 17, 2015 | 16.37 | = | 14.31 | ÷ | 0.87 | 0.87 | = | 1,523 | ÷ | 1,742,520,126 |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Hewlett Packard Enterprise Co. Annual Report.
The Price to Operating Profit (P/OP) ratio exhibits significant volatility between 2015 and 2023, reflecting inconsistent operational earnings relative to the equity market valuation.
- Profitability-Driven Valuation Spikes
- A substantial increase in the P/OP ratio occurred in 2017, reaching 36.75. This peak was primarily driven by a sharp contraction in operating profit per share, which fell from $2.49 in 2016 to $0.39 in 2017, despite a simultaneous decrease in the share price. A similar pattern recurred in 2022, where the ratio rose to 26.70 as operating profit per share declined to $0.61.
- Operational Contraction and Calculation Gaps
- In 2020, the P/OP ratio was not calculable due to a negative operating profit per share of -$0.25. This period represents the lowest point of operational efficiency within the analyzed timeframe, coinciding with a share price low of $12.12.
- Recent Valuation Compression
- The period ending in December 2023 shows a marked compression of the P/OP ratio to 10.64. This decrease is attributed to a strong recovery in operating profit per share, which increased to $1.61, outstripping the modest increase in share price to $17.09.
The historical trajectory indicates that the P/OP ratio is more sensitive to fluctuations in operating profit than to changes in share price, with valuation multiples expanding rapidly during periods of earnings decline and contracting during periods of profit recovery.
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Comparison to Competitors
Hewlett Packard Enterprise Co., P/OP, long-term trends, comparison to competitors
| Hewlett Packard Enterprise Co. | Apple Inc. | Arista Networks Inc. | Cisco Systems Inc. | Dell Technologies Inc. | Lumentum Holdings Inc. | Super Micro Computer Inc. | |
|---|---|---|---|---|---|---|---|
| Dec 22, 2023 | 10.64 | 24.04 | 36.78 | 15.32 | 5.05 | — | 17.74 |
| Dec 8, 2022 | 26.70 | 20.74 | 28.39 | 13.35 | 8.73 | 20.45 | 10.82 |
| Dec 10, 2021 | 17.38 | 22.56 | 43.25 | 19.26 | 13.19 | 11.95 | 14.57 |
| Dec 10, 2020 | — | 27.92 | 33.93 | 12.73 | 10.93 | 30.95 | 16.77 |
| Dec 13, 2019 | 16.27 | 17.29 | 21.22 | 14.46 | — | — | 11.69 |
| Dec 12, 2018 | 11.02 | 13.49 | 73.14 | 17.56 | — | 30.84 | 11.88 |
| Dec 15, 2017 | 36.75 | 14.44 | 39.21 | 13.14 | — | 72.37 | 10.46 |
| Dec 15, 2016 | 9.52 | 10.27 | 34.73 | 12.46 | — | 184.11 | 9.74 |
| Dec 17, 2015 | 16.37 | 9.34 | 30.95 | 12.36 | — | — | 8.78 |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31).