Despite delivering a strong “beat” on both top and bottom lines for the quarter, the stock tumbled in extended trading. This sell-off was primarily driven by mixed Q4 revenue guidance and near-term cautious commentary on hardware costs and sales team transitions.
Q3 FY2026 Financial Highlights (The “Beat”)
Revenue: $850.5 million (up 25% YoY), beating Wall Street expectations of $835.6 million.
Non-GAAP EPS: $1.08, outpacing analyst projections of $1.01.
Annual Recurring Revenue (ARR): Reached $3.525 billion, up 25% YoY (up 21% excluding the Red Canary acquisition, which contributed $127 million).
Operating Margin: Hit a record all-time high of 23% (non-GAAP).
Free Cash Flow (FCF): $136.0 million (up 14% YoY), representing a robust FCF margin.
Earnings Date: Monday, June 1, 2026 (after market close)
Consensus Estimates:
* Expected Non-GAAP EPS: ~$0.51 to $0.55 (Consensus is around $0.54, representing a substantial year-over-year increase) * Expected Revenue: ~$9.75B – $9.78B
HP shares have been buoyed by strong financial results from Lenovo Group, HP soared over 15.0%, and Dell surged to a fresh historic record high as investors preemptively positioned ahead of earnings next week.
Latest Reported Earnings: Q1 Fiscal 2026 (Reported March 9, 2026) HPE delivered a highly profitable first quarter, notably beating profitability and cash flow expectations, driven by strong networking demand and early synergy capture from the Juniper Networks integration:
Revenue:$9.3 billion, up 18% year-over-year (matching consensus expectations of ~$9.31 billion).
Non-GAAP Diluted EPS:$0.65, beating analyst expectations of $0.59 and exceeding the company’s guidance of $0.57 – $0.61.
GAAP Diluted EPS:$0.31.
Free Cash Flow (FCF):$708 million, up $1.6 billion year-over-year (a strong result as Q1 is seasonally a cash outflow quarter).
Key Segment & Business Highlights
Networking Surge: Revenue in the Networking segment soared 151.5% YoY to $2.7 billion (representing nearly 30% of total revenue). This was driven by WiFi-7 uptake, strong data center switching orders, and the rapid integration of Juniper.
AI Backlog: HPE built up a record $5 billion AI systems backlog, primarily from enterprise and sovereign customers, which is expected to translate into revenue in the second half of fiscal 2026.
Supply Chain Management: The company has been managing industry-wide DRAM and NAND shortages via multi-year supply agreements and agile surcharge pricing.
Raised Fiscal Year 2026 Outlook On the back of the Q1 results, HPE management raised its outlook for the full fiscal year:
FY26 Non-GAAP EPS Guidance: Raised to $2.30 to $2.50 (up from previous guidance).
FY26 Free Cash Flow Guidance: Increased to at least $2.0 billion (up from the previous target of $1.7B – $2.0B).
NVIDIA Corporation – Common is under Algo Engine buy conditions. NVIDIA announces $80.0 billion additional share repurchase authorisation.
beat with $81.6bn Q1 FY27 revenue (up 85% year-on-year), guided Q2 to $91bn vs $86bn consensus, raised dividend and added $80bn buyback, shares fell ~1.5% after-hours
Financial Results for First Quarter Fiscal 2027 Record revenue of $81.6 billion, up 85% from a year ago Record Data Center revenue of $75.2 billion, up 92% from a year ago
Announces $80.0 billion additional share repurchase authorization and increases its quarterly cash dividend from $0.01 per share to $0.25 per share. Record revenue for the first quarter ended April 26, 2026, of $81.6 billion, up 20% from the previous quarter and up 85% from a year ago. For the quarter, GAAP and non-GAAP earnings per diluted share were $2.39 and $1.87, respectively.
ARC:PIL This is an aggressive 3x-leveraged ETF offering top-5 exposure to a diverse mix of defensive value, hyper-growth mid-caps, and clinical-stage biotechnology plays.
Deep Valuation Discount: DHR has undergone a significant correction, falling roughly 30% year-to-date to trade near its 52-week low of around $161–$163. This pullback has compressed its forward P/E ratio to an attractive 19x–23x range (well below its historical averages) and puts the stock at a steep discount to its estimated DCF intrinsic value of ~$227 per share.
1–3 Year Earnings Growth Outlook
Upward EPS Momentum & Strategic M&A: Following strong Q1 execution, management raised its full-year 2026 adjusted EPS guidance to $8.35–$8.55. Looking out 2 to 3 years, earnings will be further amplified by the integration of Masimo Corporation (a $9.9B acquisition expected to close in H2 2026), where Danaher plans to rapidly scale margins using its signature Danaher Business System (DBS).
Bioprocessing Cycle Rebound: Danaher is in the early stages of a multi-year bioprocessing equipment reinvestment cycle. In Q1 2026, equipment orders surged over 30% year-over-year; as these orders convert to revenue over the next 12 to 36 months, they will drive highly profitable, recurring consumables sales.
Consensus 3-Year Outlook
Steady Compounder: Wall Street consensus model forecasts project a long-term normalized annual revenue growth rate of ~5.5% over the next 1 to 3 years as the life sciences sector fully transitions out of its post-pandemic digestion phase
