Hewlett Packard Enterprise Comp — Earnings Quality Grade F
HPE · Technology
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO increased by 13 days
AR growth 51.9% exceeds revenue growth 13.8%
Revenue grew 13.8% but CFFO declined -32.8%
Expense Quality
Inventory -18.7% vs COGS 18.1%. Normal
CapEx growth -3.2% vs revenue 13.8%. Normal
SG&A/Gross Profit = 55.0%. Normal
Gross margin 30.3%, change -2.5pp. Stable
Cash Flow Quality
CFFO far exceeds NI (ratio 51.2x). Non-cash charges depressing profits
FCF $0.6B, FCF/NI = 11.00
Accruals ratio = -3.8%. Low accruals
Cash $5.8B covers only 24% of debt $24.1B
Balance Sheet Health
Goodwill+Intangibles $30.1B = 122% of equity. Over 50%
Debt/EBITDA = 5.5x (>4x). Financial stress
Other assets -8.0% vs revenue 13.8%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles surged 62% YoY
Manipulation Score
M-Score = -2.06 (grey zone)
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-10