Hewlett Packard Enterprise Co (HPE  ) shares spiked at the open on Tuesday following reports that Elliott Investment Management has built a stake in the company.

What Happened: According to a Bloomberg report citing those familiar with the matter, Elliott Investment Management has built a stake in Hewlett Packard Enterprise valued at more than $1.5 billion.

The activist firm reportedly plans to engage with Hewlett Packard Enterprise in an attempt to boost the value of the company's stock. There were no further details shared on Elliott's exact intentions.

The report indicates that Elliott's stake makes the activist firm one of the company's top five shareholders. The company had a total market capitalization of approximately $18.75 billion as of Monday's close, according to Benzinga Pro.

Hewlett Packard Enterprise shares are down nearly 30% year-to-date, even with Tuesday's pop of approximately 5% following the activist stake reports.

Hewlett Packard Enterprise shares tumbled last month after the company issued soft guidance for the current quarter, citing tariff uncertainty, margin concerns on servers and execution problems.

Hewlett Packard Enterprise guided for second-quarter revenue of $7.2 billion to $7.6 billion, versus estimates of $7.93 billion. The company also forecasted adjusted earnings of 28 cents to 34 cents per share, well below estimates of 50 cents per share.

Several analysts slashed price targets following Hewlett Packard Enterprise's quarterly results, pointing to the software and networking company's "disappointing" outlook.

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

On the valuation side, Hewlett Packard's price-to-earnings ratio - a measure of how much an investor pays for the company's earnings - is compressed 23.98% in the current quarter when compared with last year. That places it below similar businesses in its sector like Apple (AAPL  ), Dell Technologies (DELL  ), and HP (HP  ). You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

HPE Price Action: Hewlett Packard Enterprise shares were up 4.55% at $14.94 at the time of publication Tuesday, according to Benzinga Pro.