HP Inc (HPQ) stock analysis

P/E above its 5-year median

HP's P/E of 11.1 is above its own 5-year median of 9.6.

P/E below the industry

HP's P/E of 11.1 is below the Computer and Office Equipment median of 26.0.

EV/EBITDA below its 5-year median

HP's EV/EBITDA of 7.5 is below its 5-year median of 7.6.

P/S below the industry

HP's price-to-sales of 0.44 is below the Computer and Office Equipment median of 2.52 (book value is negative, so we use sales).

Trading below fair value

The share price of $28.96 is below our fair value estimate of $48.51.

Margin of safety over 20%

The price is 40.3% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -3.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -7.2% over the last twelve months, against a 5-year average of -2.1% a year.

Growing slower than the industry

Revenue grew 8.1% over the last twelve months; the Computer and Office Equipment median is 11.2%.

Guidance raised

HP raised its fiscal 2026 free cash flow outlook on Aug 26, 2026.

Gross margin slipping

Gross margin was 19.9% over the last twelve months, against 20.9% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 52.7%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings shrank over 5 years

Net income shrank 2.1% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 4.1% over the last twelve months, against a 5-year average of 6.2%.

Net margin above the industry

HP's net margin of 4.1% is above the Computer and Office Equipment median of 3.8%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 51.0% of total debt.

Interest well covered

Operating income covers interest expense 8.2 times.

Short-term assets don't cover short-term debts

Current assets are 0.79 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.62; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

HP paid dividends worth 4.1% of the share price over the last twelve months.

Yield below Treasuries

The 4.1% yield is below the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; HP yields 4.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 44.7% of net income.

Covered by free cash flow

Dividends take 28.2% of free cash flow.