Hewlett Packard Enterprise (HPE) is scheduled to report its third-quarter fiscal 2026 results on Wednesday, September 2, after market close. Despite the stock's 126.6% gain year-to-date, analysts argue it still looks cheap.

Guidance and Consensus Estimates

HPE has guided for Q3 revenue of $11.5 billion to $12.1 billion. The Wall Street consensus sits at $12.1 billion, which would represent roughly 32% growth from the same quarter last year — a growth rate reflecting both organic demand and the addition of Juniper Networks' networking business.

On the earnings side, HPE expects non-GAAP EPS in the range of 88 to 93 cents. The Zacks consensus is slightly higher at 94 cents, a 113.6% year-over-year increase, and that estimate has been revised upward over the past 30 days.

HPE has beaten consensus earnings estimates in each of the last four quarters, with an average surprise of 16%. That track record gives analysts some confidence heading into Wednesday's print.

J.P. Morgan Sees Further Guidance Raise

J.P. Morgan analyst Joseph Cardoso expects HPE to raise its full-year revenue and earnings outlook, citing strength in traditional servers, campus networking, and cloud routing as key tailwinds.

"We expect tailwinds across both AI and non-AI infrastructure to support a further raise to HPE's revenue and earnings outlook for FY26," Cardoso said.

AI infrastructure demand is one of the clearest growth drivers for the quarter. HPE has been ramping up AI inferencing, agentic AI, and data-intensive workload solutions, supported by its partnership with NVIDIA. Broader enterprise spending on AI infrastructure has been a defining theme across the server and networking industry, and HPE's results offer another read on how much of that demand is translating into vendor orders and backlog.

AI and Private Cloud in Focus

HPE's AI Factory and Private Cloud AI products, co-engineered with NVIDIA, are positioned to support enterprise deployments across data centers and edge environments. Demand for these offerings is expected to have driven order growth and backlog expansion in Q3.

The Juniper Networks acquisition also continues to play a role. It expanded HPE's networking portfolio across campus, data center switching, routing, and security, all of which are expected to contribute to Q3 results. Networking has become a strategically important segment for HPE in part because it typically carries higher margins than AI servers, so the mix between the two will be a key detail in Wednesday's report.

GreenLake, HPE's consumption-based IT platform, gives customers a way to manage on-premises, colocation, and public cloud environments. Acquisitions of Morpheus and OpsRamp have added automation and monitoring capabilities to that platform.

Valuation Still Looks Low

Despite the big run in HPE stock this year, the valuation remains well below peers. HPE trades at a forward price-to-sales multiple of 1.45x, compared to the industry average of 5.26x.

At 13x forward earnings, HPE is trading at a discount to most peers, which are priced above 20x. Cardoso described this as a "highly digestible near-term risk-reward" for investors.

HPE stock has pulled back close to 10% since its last earnings report, even as the S&P 500 gained roughly 1% over the same period.

J.P. Morgan holds an Overweight rating and a $70 price target on HPE. The bank's consensus EPS estimate for Q3 is 93 cents adjusted, with revenue of $11.94 billion.

HPE generated strong operating and free cash flow in Q2 and continued returning capital to shareholders through dividends and buybacks.