HPE — Valuation Models

Interactive models with editable assumptions. All calculations run client-side.

Valuation Summary

Model	Intrinsic Value	vs Price ($22.13)
DCF	$-19.20	-186.7%
Graham Number	—	—
Reverse DCF	—	—
DDM	$11.74	-46.9%
EV/EBITDA	$22.27	+0.6%

Values reflect default assumptions. Adjust inputs in each model below to update.

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: -$213.50M

Near-term growth (yrs 1–5)(%)Rev: 14.4% / EPS: -88.9%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 8.32%

Computed WACC: 8.32%

Cost of equity (Re)11.51%(Rf 4.30% + β 1.31 × ERP 5.50%)

Cost of debt (Rd)5.57%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)55.09%

Debt weight (D/V)44.91%

Results

Intrinsic Value / share$-19.82

Current Price$22.13

Upside / Downside-189.6%

Net Debt (used)$19.03B

Sensitivity: WACC (rows) × Near-term g (cols)

WACC \ Near-term	6.4%	10.4%	14.4%	18.4%	22.4%
7.0%	$-19.49	$-20.47	$-21.60	$-22.89	$-24.36
8.0%	$-18.50	$-19.28	$-20.17	$-21.20	$-22.37
9.0%	$-17.81	$-18.46	$-19.20	$-20.04	$-21.00
10.0%	$-17.31	$-17.86	$-18.48	$-19.19	$-20.00
11.0%	$-16.93	$-17.40	$-17.94	$-18.55	$-19.24

2 — Graham Number

Assumptions

MultiplierGraham used 22.5 (15× P/E × 1.5× P/B)

EPS (trailing)($)Yahoo: $-0.04

Book Value / share($)Yahoo: $18.73

Results

Graham Number requires positive EPS and positive Book Value per share. EPS is zero or negative.

Graham Number—

Current Price$22.13

Margin of Safety—

Formula: √(22.5 × max(0,EPS) × max(0,BVPS))

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 8.32%

Terminal growth rate(%)

Computed WACC: 8.32%

Cost of equity (Re)11.51%(Rf 4.30% + β 1.31 × ERP 5.50%)

Cost of debt (Rd)5.57%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)55.09%

Debt weight (D/V)44.91%

Results

Reverse DCF requires positive TTM free cash flow.

Current Price$22.13

Implied Near-term FCF Growth—

Historical Revenue Growth14.4%

Historical Earnings Growth-88.9%

Base FCF (TTM)-$213.50M

Implied growth is the FCF growth rate (yrs 1–5) that makes the DCF intrinsic value equal the current price. Long-term growth is set to half the implied near-term rate.

4 — Dividend Discount Model (DDM)

Assumptions

Annual dividend D0($/share)Yahoo: $0.57

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$11.74

Current Price$22.13

Upside / Downside-46.9%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $4.49B

Target EV/EBITDA multipleCurrent: 10.8×

Net Debt($B)Default: $19.03B

Results

Implied Equity Value / share$22.27

Current Price$22.13

Upside / Downside+0.6%

Implied EV$48.63B

Sensitivity: EV/EBITDA multiple (rows) × Net Debt (cols)

Mult \ Net Debt	$9.03B	$14.03B	$19.03B	$24.03B	$29.03B
6.8x	$16.28	$12.52	$8.75	$4.99	$1.23
8.8x	$23.04	$19.28	$15.51	$11.75	$7.99
10.8x	$29.80	$26.04	$22.27	$18.51	$14.75
12.8x	$36.56	$32.80	$29.03	$25.27	$21.51
14.8x	$43.32	$39.56	$35.79	$32.03	$28.27

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