HPQ
HP Inc.$18.99
Buy
Target $27.21
Report: Mar 07, 2026Technology • Computer Hardware • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$18.99+43.3%
Rec: BuyConviction: High
Entry Target
$18.99
(0% above current)
Fair Value
$27.21
(43% above current)
Stop Loss
$17.56
(8% below current)
Position Size
Full
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$29.55
52 Week Low$17.56
Avg. 3 Month Volume19.71M
Efficiency
LTM Gross Margin20.3%
LTM EBITDA Margin7.2%
LTM EBIT Margin5.5%
LTM Operating Margin5.5%
LTM ROA6.2%
LTM ROE-305.1%
LTM ROIC29.9%
LTM ROCE25.5%
Capital Structure
Market Cap (MM)$17.6B
Enterprise Value (MM)$24.1B
Shares Outstanding926.00M
Total Debt (MM)$9.70B
Cash & Equivalents (MM)$3.15B
LTM Net Debt (MM)$6.54B
LTM Net Debt/EBITDA1.6x
Growth
TTM Rev. Growth4.4%
Last 3-Yr Rev. CAGR-2.0%
Last 3-Yr EBITDA CAGR-6.2%
Last 3-Yr EPS CAGR1.3%
Valuation
Street Target Price$21.50
LTM EV/Revenue0.4x
LTM EV/Gross Profit2.1x
LTM EV/EBIT7.8x
LTM EV/EBITDA6.0x
LTM P/E7.0x
LTM EV/FCF8.4x
LTM P/FCF6.1x
LTM P/TB0.5x
LTM P/B-22.9x
Dividend Yield6.1%
Payout Ratio43.7%
Executive SummarySituation: Current price is $18.99 versus fair value $27.21 (43.3% expected return), and valuation confidence is stable. Debate: Bull case depends on AI-PC Shipment Mix Exceeds 40% This would validate the premium pricing strategy and Personal Systems margin recovery, addressing the market's primary concern regarding commodity cost pass-through. Bear case centers on Persistent Memory Cost Inflation If memory and storage costs remain at 35% of PC BOM, the company may be unable to restore Personal Systems margins to the 5-7% range. Conclusion: Recommendation is Buy with Full sizing and Long-Term horizon.
Bull Case
The AI-PC refresh cycle accelerates to 50% of the shipment mix, driving ASP expansion and Personal Systems margins back to 7.5%. The Future Ready program achieves $1 billion in incremental AI-enabled productivity savings by FY2028, significantly offsetting commodity volatility.
Bear Case
Persistent memory-cost inflation and new tariffs permanently impair gross margins below 20%. Secular decline in the high-margin printing supplies business accelerates due to right-to-repair regulations and low-cost Chinese competition.
Key Catalysts
Near-Term (0-6 months)Impact: High
AI-PC Shipment Mix Exceeds 40% This would validate the premium pricing strategy and Personal Systems margin recovery, addressing the market'...
Mid-Term (6-18 months)Impact: Moderate
Appointment of Permanent CEO Resolving the leadership void with a high-caliber external hire would shift sentiment from 'uncertainty' to 'ex...
Long-Term (18+ months)Impact: Moderate
HPQ is highly relevant at this moment because it is trading at a multi-year low ($18.99) despite a 146% cash conversion ratio, creating a ra...
Primary Risks
Concern: Medium
Persistent Memory Cost Inflation If memory and storage costs remain at 35% of PC BOM, the company may be unable to restore Personal Systems...
Concern: High
Printing Moat Erosion Regulatory pressure on 'Dynamic Security' firmware could allow third-party cartridges to flood the market, destroying...
Concern: Medium
The stewardship verdict is strong due to the Independent Chair structure and the presence of high-caliber directors like Chip Bergh (ex-Levi...
Recent Activity
2025-11-21Analyst Target
+5.97%Firm: Morgan Stanley Analyst: Erik Woodring Price Target: $21.00 Price When Posted: $22.61 Implied Downside: -7.1%
2025-05-29SEC Filing (8-K)
-8.27%HP Inc. reported fiscal 2025 second quarter results with revenue of $13.2 billion, up 3.3% year-over-year.
2025-04-03SEC Filing (8-K)
-14.71%HP Inc. amends bylaws to reduce board size from 15 to 13 directors
2025-02-28SEC Filing (8-K)
-6.82%HP Inc. reports fiscal 2025 first quarter results with revenue growth
2024-11-27SEC Filing (8-K)
-11.36%HP Inc. reports fiscal 2024 full year and fourth quarter results with revenue growth and dividend increase
Valuation Table
9.8/10Decision Grade
Scenario Range
$8
Bear
$25
Base
$34
Bull
$19