HP (HPQ) AI Stock Analysis

• Market Cap: $23.88B
• Dividend Yield: 4.46%
• Average Volume (3M): 10.16M
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.10
• Revenue Growth: 1.03%
• EPS Growth: -18.56%
• Country: US
• Employees: 58,000
• Sector: Technology
• Sector Strength: 57
• Industry: Computer Hardware
• EPS (TTM): 2.78
• Shares Outstanding: 942,703,000
• 10 Day Avg. Volume: 9,760,476
• 30 Day Avg. Volume: 10,162,624
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.50
• Price to Cash Flow (P/CF): 18.10
• P/FCF Ratio: 14.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $34.18
• Price Target Upside: 35.21% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

HP's overall stock score reflects a balanced view of stability in financial performance and attractive valuation, offset by technical weakness and market challenges. The company's strategic initiatives and positive earnings call contribute positively, but high leverage and negative revenue growth remain concerns. Investors may find value in HP's dividend yield and strategic advancements, though caution is warranted due to technical indicators suggesting bearish momentum.

Positive Factors

Growth Prospects

The next-generation AI PC is set to be a new growth driver, differentiating its products from competitors and positioning HP for increased AI PC penetration.

Market Position

The company holds a 20.4% market share in global PC shipments and dominates the global hardcopy peripherals market with a 33% market share.

Revenue Growth

HP is guiding for stronger PS revenue for the year, with the company’s growth now expected to exceed the underlying market.

Negative Factors

Economic Uncertainty

There are uncertainties around tariffs, commodity outlook (memory price headwinds) and uptake of AI PCs, that all leave a more risky setup into 2H.

Market Competition

Intense PC market competition may put pressure on its market share and profitability.

Print Revenue Decline

Declining demand for traditional printing is impacting print-related revenue and margins.

HP Business Overview & Revenue Model

Company Description

HP 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 Money

HP Inc. generates revenue primarily through the sale of personal computing devices and printing products. The company's key revenue streams are divided into two main segments: Personal Systems and Printing. The Personal Systems segment includes sales of commercial and consumer PCs, workstations, and other computing devices, which contribute significantly to the company's earnings. The Printing segment encompasses the sale of printers, supplies such as ink and toner, and managed print services. HP also benefits from strategic partnerships and collaborations with other technology companies, which help to expand its market reach and product offerings. Additionally, the company invests in research and development to drive innovation and maintain a competitive edge in the rapidly evolving technology landscape.

HP Financial Statement Overview

Summary

HP demonstrates stable profitability with consistent margins, though revenue growth has been challenged. The balance sheet indicates high leverage, which could pose risks if not managed carefully. Cash flow generation is strong, supporting operations and investments. Overall, while there are strengths in cash flow and profitability, 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.

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.

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.

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
4.62B	4.72B	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
10.93B	3.24B	3.23B	3.15B	4.30B	4.86B
	Total Assets
124.50B	39.91B	37.00B	38.59B	38.61B	34.68B
	Total Debt
22.30B	10.90B	10.74B	11.01B	7.49B	6.22B
	Net Debt
11.38B	7.66B	7.51B	7.87B	3.19B	1.35B
	Total Liabilities
83.72B	41.23B	38.07B	41.51B	40.26B	36.91B
	Stockholders Equity
40.45B	2.96B	-1.07B	-2.92B	-1.65B	-2.23B
Cash Flow		Free Cash Flow
3.27B	3.75B	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

• Technical Analysis Sentiment: Neutral
• Last Price: 25.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HPQ, the sentiment is Neutral. The current price of 25.28 is above the 20-day moving average (MA) of 24.59, below the 50-day MA of 28.18, and below the 200-day MA of 32.88, indicating a neutral trend. The MACD of -0.98 indicates Negative momentum. The RSI at 47.80 is Neutral, neither overbought nor oversold. The STOCH value of 83.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HPQ.

HP Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSTG	72 Outperform	$14.90B	149.40	8.29%	―	11.92%	74.08%
NTAP	70 Outperform	$18.20B	16.32	114.33%	2.34%	5.46%	23.49%
WDC	68 Neutral	$13.97B	9.58	13.99%	―	38.59%	―
DELL	66 Neutral	$66.22B	14.80	-179.12%	1.88%	7.84%	42.63%
STX	66 Neutral	$17.51B	15.20	-109.27%	3.42%	24.17%	―
HPQ	63 Neutral	$23.88B	9.10	84.33%	4.46%	1.03%	-18.56%
Sector *	59 Neutral	$10.74B	10.21	-6.69%	3.04%	7.44%	-10.92%

HP Corporate Events

HP Appoints Gianluca Pettiti to Board of Directors

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.

HP Appoints Songyee Yoon to Board, Expands Directorships

On February 4, 2025, HP Inc.’s Board of Directors expanded its size and elected Songyee Yoon as a new director, effective February 6, 2025. Ms. Yoon, a Managing Partner at Principal Venture Partners, L.P., will also serve on the Audit Committee and Finance, Investment and Technology Committee, receiving compensation consistent with other non-employee directors. Additionally, the Board amended the company’s bylaws to increase the number of authorized directorships from 13 to 14 to accommodate her appointment.