Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Computer Hardware industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Computer Hardware Stock News

Before choosing which top Computer Hardware stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The outlook for technology and computer hardware is generally positive. While the past year has been hectic between the pandemic, semiconductor chip shortages, and trade talks, there are encouraging signs of improvement. With rising demand for computers by consumers, a backlog of orders is expected to generate 18-20% growth in computer sales. Computer and table sales increased throughout 2020 with people working from home, and growth is expected to continue with work from home becoming more viable for many consumers. Another focus for computer hardware is wearable technology. Smart devices are becoming commonplace amongst consumers, with growth expected to be increase into the double digits throughout 2022 expected by CFRA. According to the Business Research Company, the global computer hardware market is expected to grow from $862.93 billion in 2020 to $944.09 billion in 2021 at a compound annual growth rate (CAGR) of 9.4%. The market is expected to reach $1178.15 billion in 2025 at a CAGR of 6%.

Why Focus on Undervalued Computer Hardware Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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5 Undervalued Computer Hardware Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Computer Hardware industry for Friday, January 13, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Computer Hardware industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Hewlett Packard Enterprise Co’s Value Grade

Value Grade:

Hewlett Packard Enterprise Company (HPE) is a technology company focused on developing intelligent solutions that allow customers to capture, analyze, and act upon data from edge to cloud. The Company operates through six segments: Compute, High Performance Computing & Artificial Intelligence (HPC & AI), Storage, Intelligent Edge, Financial Services (FS), and Corporate Investments and Other. Its Compute segments includes both general purpose servers for multi-workload computing and workload-optimized servers to deliver performance and value for applications. Its HPC & AI segment offers integrated systems comprised of software and hardware designed to address high-performance computing (HPC), artificial intelligence (AI), data analytics, and transaction processing workloads for customers globally. Intelligent Edge segment offers wired and wireless local area network (LAN), campus and data center switching, software-defined wide-area-network, network security, and associated services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Hewlett Packard Enterprise Co has a Value Score of 71, which is considered to be undervalued.

When you look at Hewlett Packard Enterprise Co’s price-to-sales ratio at 0.74 compared to the industry median at 0.64, this company has a higher price relative to revenue compared to its peers. This could make Hewlett Packard Enterprise Co’s stock less attractive for value investors.

Hewlett Packard Enterprise Co’s price-earnings ratio is 25.13 compared to the industry median at 14.50. This means it has a higher share price relative to earnings compared to its peers. This could make Hewlett Packard Enterprise Co less attractive for value investors.

Now, let’s assess Hewlett Packard Enterprise Co’s EV/EBITDA ratio, also known as enterprise multiple. At 5.7, when compared to the industry median of 8.4, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Hewlett Packard Enterprise Co’s shareholder yield is higher than its industry median ratio of (1.24%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Hewlett Packard Enterprise Co’s price-to-book ratio is lower than its industry median ratio of 1.35. This could make Hewlett Packard Enterprise Co more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Hewlett Packard Enterprise Co’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Hewlett Packard Enterprise Co’s price-to-free-cash-flow ratio is lower than its industry median ratio of 25.74. This could make Hewlett Packard Enterprise Co more attractive because the lower P/FCF ratio indicates that Hewlett Packard Enterprise Co is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

KORE Group Holdings Inc’s Value Grade

Value Grade:

KORE Group Holdings, Inc. is a provider Internet of Things (IoT) services and solutions. The Company provides advanced connectivity services, location-based services, device solutions, managed and professional services used in the development and support of IoT solutions and applications. The Company's IoT platform is delivered in partnership with mobile network operators and provides secure wireless connectivity to mobile and fixed devices. The Company's products include IoT Connectivity as a Service (CaaS), Connectivity Enablement as a Service (CEaaS), IoT Device Management Services, IoT Security Location Based Services (LBS), KORE eSIM, ConnectivityPro, KORE One, SecurityPro (SaaS) platform and PositionLogic platform. The Company provides products and services to range of industries, including connected health, fleet management, asset monitoring, communication services and industrial IoT.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

KORE Group Holdings Inc has a Value Score of 61, which is considered to be undervalued.

KORE Group Holdings Inc’s price-to-book ratio is higher than its peers. This could make KORE Group Holdings Inc less attractive for value investors when compared to the industry median at 1.35.

You can read more about KORE Group Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Lenovo Group Ltd (ADR)’s Value Grade

Value Grade:

Lenovo Group Limited is an investment holding company principally engaged in personal computers and related businesses. The Company’s main products include Think-branded commercial personal computers and Idea-branded consumer personal computers, as well as servers, workstations and a family of mobile Internet devices, including tablets and smart phones. The Company operates its business through four geographical segments, including China, Asia Pacific (AP), Europe, the Middle East and Africa (EMEA) and Americas (AG). The Company also provides cloud service and other related services. The Company distributes its products in domestic market and to overseas markets.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Lenovo Group Ltd (ADR) has a Value Score of 97, which is considered to be undervalued.

Lenovo Group Ltd (ADR)’s price-earnings ratio is 5.0 compared to the industry median at 14.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Lenovo Group Ltd (ADR) more attractive for value investors.

Lenovo Group Ltd (ADR)’s price-to-book ratio is lower than its peers. This could make Lenovo Group Ltd (ADR) more attractive for value investors when compared to the industry median at 1.35.

You can read more about Lenovo Group Ltd (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Super Micro Computer, Inc.’s Value Grade

Value Grade:

Super Micro Computer, Inc. is a global technology company. The Company provides Silicon Valley-based accelerated compute platforms that are application-optimized server and storage systems for various markets, including enterprise data centers, cloud computing, artificial intelligence, fifth generation (5G) and edge computing. The Company’s solutions include artificial intelligence (AI) and high-performance computing (HPC), enterprise applications and data analytics, data management, cloud and virtualization, 5G, edge computing and Internet of things (IoT), and hyperscale infrastructure. The Company also provides global support and services to help customers install, upgrade, and maintain their computing infrastructure. The Company offers an array of products which include servers and storage, building blocks, IoT and embedded, networking, and workstations and gaming products. The Company operates in United States, Asia and Europe.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Super Micro Computer, Inc. has a Value Score of 62, which is considered to be undervalued.

Super Micro Computer, Inc.’s price-earnings ratio is 9.9 compared to the industry median at 14.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Super Micro Computer, Inc. more attractive for value investors.

Super Micro Computer, Inc.’s price-to-book ratio is lower than its peers. This could make Super Micro Computer, Inc. more attractive for value investors when compared to the industry median at 1.35.

You can read more about Super Micro Computer, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Seagate Technology Holdings PLC’s Value Grade

Value Grade:

Seagate Technology Holdings plc is a provider of data storage technology and solutions. The Company’s principal products are hard disk drives, including disk drives, hard drives or hard disk drives (HDDs). In addition to HDDs, the Company produces a range of data storage products, including solid state drives (SSDs), solid state hybrid drives (SSHDs), storage subsystems, as well as a scalable edge-to-cloud mass data platform, which includes data transfer shuttles and a storage-as-a-service cloud. The Company’s HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage involves use cases, such as hyperscale data centers and public clouds, as well as emerging use cases. Legacy markets include markets the Company continues to serve. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment, Serial Attached SCSI and Non-Volatile Memory Express-based designs to support a variety of mass capacity and legacy applications.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Seagate Technology Holdings PLC has a Value Score of 71, which is considered to be undervalued.

Seagate Technology Holdings PLC’s price-earnings ratio is 11.1 compared to the industry median at 14.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Seagate Technology Holdings PLC more attractive for value investors.

You can read more about Seagate Technology Holdings PLC’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Computer Hardware Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Computer Hardware stocks as well as other industrys.

Choosing Which of the 5 Best Computer Hardware Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Hewlett Packard Enterprise Co stock has a Value Grade of B.
• KORE Group Holdings Inc stock has a Value Grade of B.
• Lenovo Group Ltd (ADR) stock has a Value Grade of A.
• Super Micro Computer, Inc. stock has a Value Grade of B.
• Seagate Technology Holdings PLC stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Computer Hardware industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Computer Hardware Stocks

Want to learn more about Computer Hardware stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 5 Undervalued Computer Hardware Stocks for Friday, January 13
• 6 Undervalued Computer Hardware Stocks for Thursday, January 12
• Which Is a Better Investment, Dell Technologies Inc or TD Synnex Corp Stock?
• Which Is a Better Investment, Hewlett Packard Enterprise Co or TD Synnex Corp Stock?

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