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Sacconaghi’s deep-dive into the financials of DELL, HPE, and HP (HPQ) for the last four years shows Revenues have come full circle and are essentially flat with pre-pandemic levels. The seasoned tech analyst also highlights flattish growth and profit generation, which is underscoring their long term challenges.
“We view the names more as trading stocks than long-term holdings, but believe that DELL and HPE and overly discounted at current levels and offer favorable risk reward,” Sacconaghi added.
HPE trades at 7X Bernstein’s FY23 EPS estimates, while Dell’s multiple stands at 8X.
On the other hand, HPQ is reiterated at Market Perform as Sacconaghi sees it “as more structurally challenged than either DELL or HPE, with mean reversion in a potentially over-earning printing business as a downside risk.”
By Senad Karaahmetovic
