Hewlett Packard Enterprise Company (HPE) vs Lumentum Holdings Inc. (LITE)

Hewlett Packard Enterprise Company and Lumentum Holdings Inc. are both Communication Equipment companies. Hewlett Packard Enterprise Company is the larger, with a market value of $58.6B against $46.2B — 1.3× the size. Lumentum Holdings Inc. has negative trailing earnings, so its P/E is not meaningful; Hewlett Packard Enterprise Company trades at 22.3×. Lumentum Holdings Inc. grew revenue faster over the last twelve months: 103.2% against 26.6%. Hewlett Packard Enterprise Company has the higher net margin (6.39% vs −175.8%) and the lower return on invested capital (4.31% vs 13.7%). Across the 20 metrics below, Hewlett Packard Enterprise Company leads on 12 and Lumentum Holdings Inc. on 8.

Valuation

Metric HPE LITE Communication Equipment median
P/E 22.29 n/m 29.86
P/S 1.43 12.80 1.68
P/B 2.25 10.47 1.72
Price to free cash flow 13.10 118.47 21.71
EV/EBITDA 9.20 40.70 14.04
EV/Sales 1.70 12.64 1.76
Earnings yield 4.49% (15.00%) (0.87%)
Free cash flow yield 7.63% 0.84% 0.68%

Profitability

Metric HPE LITE Communication Equipment median
Gross margin 36.73% 45.91% 39.34%
Operating margin 6.21% 23.46% 2.43%
Net margin 6.39% (175.78%) (0.64%)
Free cash flow margin 10.91% 10.80% 0.27%
Return on equity 10.48% (245.79%) 0.00%
Return on assets 3.32% (110.69%) (0.10%)
Return on invested capital 4.31% 13.74% 1.29%

Growth

Metric HPE LITE Communication Equipment median
Revenue growth (TTM) 26.59% 103.20% 9.66%
EPS growth (last fiscal year) (102.07%) (25,224.32%) 31.29%
Revenue growth, 5-year CAGR 4.91% 11.58% 4.92%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric HPE LITE Communication Equipment median
Debt to equity 0.65 0.31 0.05
Current ratio 1.11 1.61 1.99
Net debt to EBITDA 3.06 (1.38) 0.93

Dividend

Metric HPE LITE Communication Equipment median
Dividend yield 1.27% — 1.10%
Payout ratio 0.30 — 0.44

Size

Metric HPE LITE Communication Equipment median
Market cap 58.62b 46.23b 495.24m

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