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HP (HPQ)
NYSE:HPQ
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HP
(NYSE:HPQ)
Rating:64Neutral
Price Target:
$27.00
▲(7.48%Upside)
Positive Factors
Business Transformation
HPQ is undergoing a significant transformation by shifting to a subscription-based model, starting with its printing business and expanding across its product portfolio.
Strategic Adjustments
Management anticipates offsetting the tariff impact by fulfilling North American demand outside of China, suggesting strategic adjustments to mitigate challenges.
Negative Factors
Earnings Guidance
The company's earnings guidance was lowered due to the ongoing tariff impacts, indicating potential future challenges.
Market Competition
Intense PC market competition may put pressure on its market share and profitability.
HP (HPQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.65B
Dividend Yield4.49%
Average Volume (3M)8.67M
Price to Earnings (P/E)9.7
Beta (1Y)1.13
Revenue Growth2.08%
EPS Growth-12.41%
CountryUS
Employees58,000
SectorTechnology
Sector Strength83
IndustryComputer Hardware
Share Statistics
EPS (TTM)0.71
Shares Outstanding939,272,900
10 Day Avg. Volume12,596,223
30 Day Avg. Volume8,672,073
Financial Highlights & Ratios
PEG Ratio-8.54
Price to Book (P/B)-22.95
Price to Sales (P/S)0.00
P/FCF Ratio7.49
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.52Price Target Upside13.54% Upside
Rating ConsensusHold
Number of Analyst Covering11
HP Business Overview & Revenue Model
Company DescriptionHP Inc. provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktop and notebook personal computers, workstations, thin clients, commercial mobility devices, retail point-of-sale systems, displays and peripherals, software, support, and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions, and services. The Corporate Investments segment is involved in the HP Labs and business incubation, and investment projects. It serves individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health, and education sectors. The company was formerly known as Hewlett-Packard Company and changed its name to HP Inc. in October 2015. HP Inc. was founded in 1939 and is headquartered in Palo Alto, California.
How the Company Makes MoneyHP Inc. generates revenue primarily through the sale of personal systems and printing products. The company's Personal Systems segment includes desktops, notebooks, workstations, and other related services, contributing significantly to its income. HP's Printing segment encompasses the sale of printer hardware, supplies such as ink and toner, and managed print services. A key revenue stream for HP is the recurring purchase of printing supplies, which provides a stable and profitable income source. Additionally, HP partners with other technology firms and retailers to expand its market presence and distribution channels. The company also invests in innovation and sustainable practices to enhance its product offerings, thus driving sales and customer loyalty.
HP Earnings Call Summary
Earnings Call Date:May 28, 2025
(Q2-2025)
| % Change Since: -7.65%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Neutral
The earnings call revealed a balanced perspective with substantial achievements in revenue growth, innovation, and strategic manufacturing diversification countered by significant challenges due to tariff impacts and moderated future guidance. The company is proactively addressing these challenges with cost-saving initiatives and strategic adjustments.Q2-2025 Updates
Positive Updates
Solid Revenue Growth
HP delivered revenue growth for the fourth consecutive quarter, with a 5% increase in constant currency year-over-year, driven by strong growth in personal systems, particularly in commercial and high-value categories.
Manufacturing Diversification
HP expanded its manufacturing footprint to Vietnam, Thailand, India, Mexico, and the US to mitigate the impact of tariffs. By the end of June, they expect almost all products sold in North America to be built outside of China.
AI and Innovation Advancements
HP introduced a comprehensive AI PC portfolio, redesigned HP EliteBook and EliteDesk, and launched the HP ZGX AI station in collaboration with NVIDIA. The new LaserJet Enterprise devices were also introduced as the first printer designed to guard against quantum computer attacks.
Future-Ready Savings Plan
HP expects to deliver at least $2 billion in gross annual run rate structural savings by the end of fiscal year 2025, exceeding their previous goal.
Negative Updates
Tariff Impact on Operating Profit
Additional tariff costs could not be fully mitigated in the quarter, leading to a net impact of approximately 100 basis points on non-GAAP operating profit, translating to a $0.12 impact on non-GAAP earnings per share.
Print Revenue Decline
Print revenue declined 3% in constant currency, with softness in North America and continued weak demand in China.
Lowered Guidance and Market Uncertainty
HP moderated its guidance for the second half of the year due to macroeconomic uncertainty, expecting the PC market to grow low single digits for the year, with print market expected to decline.
Free Cash Flow Challenges
Free cash flow was slightly negative due to the timing of payments for intentional inventory as part of tariff mitigation, impacting the cash conversion cycle.
Company Guidance
During the Q2 2025 earnings call for HP Inc., several key metrics and guidance figures were shared. Revenue grew by 5% in constant currency year-over-year, driven primarily by an 8% increase in personal systems revenue, with commercial PC revenue up 9%. However, non-GAAP operating profit was negatively impacted by roughly 100 basis points due to additional tariff costs, resulting in a $0.12 hit to non-GAAP earnings per share. Despite these challenges, HP anticipates a return to its long-term operating margin range of 5% to 7% for personal systems next quarter, with print operating margins expected to remain within the 16% to 19% range. The company aims to achieve at least $2 billion in gross annual run-rate structural savings by the end of fiscal 2025. For Q3, HP projects non-GAAP diluted EPS to be between $0.68 and $0.80, and for fiscal 2025, a range of $3.00 to $3.30. The company continues to focus on supply chain diversification, AI-driven innovations, and strategic cost management to navigate the dynamic market environment.HP Financial Statement Overview
Summary
HP's financial performance shows stable profitability with consistent margins. However, revenue growth has been negative, indicating challenges in market demand or competition. The balance sheet reflects high leverage, posing potential risks if not managed carefully. Strong cash flow generation supports operations, but attention is needed on managing debt levels and reversing revenue declines.Income Statement
HP has shown stable gross and net profit margins with a gross profit margin of approximately 21.7% and net profit margin of 5.0% for the TTM. Despite a slight decline in revenue over recent years, the company has maintained consistent EBIT and EBITDA margins. However, the revenue growth rate has been negative, indicating potential challenges in market demand or competition.65
Positive
Balance Sheet
HP's balance sheet reflects a high debt-to-equity ratio with equity being minimal or negative in past periods, indicating high leverage. The equity ratio has been negative, raising concerns about financial stability. However, the company has managed to maintain a reasonable return on equity in the TTM due to positive net income.50
Neutral
Cash Flow
HP has shown strong cash flow performance with positive free cash flow growth in the TTM. The operating cash flow to net income ratio is robust, reflecting efficient cash generation from operations. However, the free cash flow to net income ratio has seen fluctuations, suggesting some volatility in capital expenditures and cash management.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 53.84B | 53.56B | 53.72B | 62.98B | 63.49B | 56.64B | Gross Profit |
| 11.69B | 11.82B | 11.51B | 12.34B | 13.42B | 10.44B | EBIT |
| 3.82B | 3.82B | 3.46B | 4.68B | 5.30B | 3.46B | EBITDA |
| 4.82B | 4.71B | 4.46B | 5.45B | 8.60B | 4.26B | Net Income Common Stockholders |
| 2.72B | 2.77B | 3.26B | 3.13B | 6.54B | 2.81B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.89B | 3.25B | 3.23B | 3.15B | 4.30B | 4.86B | Total Assets |
| 38.93B | 39.91B | 37.00B | 38.59B | 38.61B | 34.68B | Total Debt |
| 10.90B | 10.90B | 10.74B | 11.01B | 7.49B | 6.22B | Net Debt |
| 8.02B | 7.66B | 7.51B | 7.87B | 3.19B | 1.35B | Total Liabilities |
| 40.00B | 41.23B | 38.07B | 41.51B | 40.26B | 36.91B | Stockholders Equity |
| -1.07B | -1.32B | -1.07B | -2.92B | -1.65B | -2.23B |
| Cash Flow | Free Cash Flow | ||||
| 3.27B | 3.16B | 2.96B | 3.67B | 5.83B | 3.74B | Operating Cash Flow |
| 4.00B | 3.75B | 3.57B | 4.46B | 6.41B | 4.32B | Investing Cash Flow |
| -718.00M | -646.00M | -590.00M | -3.55B | -1.01B | -1.02B | Financing Cash Flow |
| -2.81B | -3.08B | -2.89B | -2.07B | -5.96B | -2.97B |
HP Technical Analysis
Negative
25.12
Price Trends
25.85
Negative
28.58
Negative
31.69
Negative
Market Momentum
-0.48
Positive
39.82
Neutral
29.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HPQ, the sentiment is Negative. The current price of 25.12 is below the 20-day moving average (MA) of 27.14, below the 50-day MA of 25.85, and below the 200-day MA of 31.69, indicating a bearish trend. The MACD of -0.48 indicates Positive momentum. The RSI at 39.82 is Neutral, neither overbought nor oversold. The STOCH value of 29.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HPQ.
HP Risk Analysis
HP disclosed 32 risk factors in its most recent earnings report. HP reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
HP Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $21.93B | 18.74 | 108.51% | 1.96% | 5.00% | 22.19% | |
75 Outperform | $18.09B | 148.79 | 9.76% | ― | 10.85% | 30.85% | |
72 Outperform | $77.75B | 18.15 | -179.12% | 1.64% | 7.67% | ― | |
70 Neutral | $19.35B | 10.54 | 28.45% | ― | 21.22% | ― | |
68 Neutral | $26.95B | 18.35 | -109.27% | 2.24% | 36.29% | ― | |
64 Neutral | $23.65B | 9.70 | 84.33% | 4.49% | 2.08% | -12.41% | |
62 Neutral | $11.81B | 10.34 | -7.44% | 2.91% | 7.41% | -7.93% |
* Technology Sector Average
Performance Comparison
HPQ
HP
25.12
-9.84
-28.15%
NTAP
NetApp
103.06
-17.52
-14.53%
STX
Seagate Tech
130.17
33.48
34.63%
WDC
Western Digital
57.02
-1.13
-1.94%
PSTG
Pure Storage
55.29
-10.81
-16.35%
DELL
Dell Technologies
114.22
-15.94
-12.25%
HP Corporate Events
Executive/Board Changes
HP Appoints Gianluca Pettiti to Board of Directors
Neutral
Feb 21, 2025
On February 21, 2025, HP Inc. expanded its Board of Directors by appointing Gianluca Pettiti, an executive from Thermo Fisher Scientific, as an independent director. This move necessitated an amendment to the company’s bylaws, increasing the number of authorized directorships from 14 to 15. Mr. Pettiti will serve on the Finance, Investment and Technology Committee and the HR and Compensation Committee, receiving compensation consistent with other non-employee directors.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.