HP (HPQ) AI Stock Analysis

• Market Cap: $17.37B
• Dividend Yield: 5.09%
• Average Volume (3M): 19.81M
• Price to Earnings (P/E): 7.2
• Beta (1Y): 1.23
• Revenue Growth: 4.09%
• EPS Growth: -5.77%
• Country: US
• Employees: 58,000
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 0.81
• Shares Outstanding: 914,550,200
• 10 Day Avg. Volume: 21,180,495
• 30 Day Avg. Volume: 19,814,785
• PEG Ratio: -1.83
• Price to Book (P/B): -75.65
• Price to Sales (P/S): 0.47
• P/FCF Ratio: 9.35
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 0.43
• Enterprise Value/Gross Profit: 2.12
• Enterprise Value/Ebitda: 5.90
• 1Y Price Target: $19.50
• Price Target Upside: 2.69% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.99
• Revenue Forecast (FY): $55.40B

• Rating: 57 Neutral
• Price Target: $19.00 ▲(0.05% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is held back primarily by balance-sheet leverage/negative equity risk and weak technical trend signals. Offsetting those, HPQ’s valuation is attractive (low P/E and high dividend yield) and the earnings call showed solid near-term execution, though guidance leans cautious due to memory-cost pressure and margin uncertainty.

Positive Factors

Strong cash generation

Consistent TTM operating cash flow (~$3.7B) and free cash flow (~$2.9B) provide durable internal funding for buybacks, dividends, restructuring and capex. This cash conversion supports strategic flexibility even with elevated leverage, sustaining operations and long‑term investments.

Diversified recurring revenue and high-value print growth

Growth in industrial and 3D printing plus expanding subscription ink services and Big Tank share increase the portion of recurring, higher‑value revenue. This diversification reduces reliance on cyclical PC hardware and supports steadier margins and cash flow over multiple cycles.

AI/product innovation and strategic partnerships

Scale of WXP fleet data, accelerating AI‑enabled product launches and partnerships with Microsoft and exploratory work with OpenAI create structural differentiation. These assets and alliances improve product stickiness, enable higher‑value offerings, and support margin expansion over time.

Negative Factors

Elevated leverage and negative equity history

High gross leverage and recurring negative equity history constrain financial flexibility, increase refinancing and interest risks, and reduce capacity to absorb shocks. This capital structure makes sustained investment, opportunistic M&A or aggressive buybacks riskier if earnings weaken.

Severe memory cost inflation pressuring margins

A rapid doubling of memory costs expanding to ~35% of PC BOM materially compresses Personal Systems margins. Even with supply agreements and pricing actions, sustained elevated commodity costs and BOM sensitivity can erode profitability and slow recovery of historical margin levels.

Structural industry demand headwinds for PCs

An expected double‑digit calendar‑year decline in PC unit TAM is a structural headwind to core Personal Systems revenue and unit leverage. Lower market volume limits scale benefits, pressures prices and makes margin recovery harder even if market share or product mix improves.

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 generates revenue through multiple key streams. The Personal Systems segment primarily contributes by selling hardware products such as laptops and desktops, along with accessories and services. The Printing segment generates revenue through the sale of printers and printing supplies, including ink and toner cartridges. HP also benefits from its subscription-based services, such as HP Instant Ink, which provides customers with ink delivery based on usage. Significant partnerships with retailers and businesses enhance HP's distribution channels, while contracts with enterprises for managed print services and device management solutions further bolster its earnings. Overall, HP's diversified product offerings and strategic collaborations play a crucial role in sustaining its revenue growth.

HP Financial Statement Overview

Summary

Cash flow is a clear strength (TTM operating cash flow ~$3.7B; free cash flow ~$2.9B), but overall financial quality is constrained by high leverage (TTM debt ~$9.7B vs. equity ~$3.4B; annual periods show negative equity) and softening margins versus prior years despite modest revenue growth.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up ~1.7% versus the latest annual period, indicating modest top-line growth. Profitability is steady but not strong for the space: TTM gross margin is ~20.1% and net margin is ~4.5%. A key weakness is margin compression versus prior years (e.g., annual operating margin and EBITDA margin have trended down from 2021–2024 levels into 2025/TTM), suggesting a tougher pricing/cost environment despite relatively stable revenue.

Balance Sheet

Leverage is the central issue. TTM total debt is ~$9.7B against equity of ~$3.4B (debt-to-equity ~2.85x), which is elevated and limits flexibility. The annual periods show negative equity from 2021–2025, a notable balance-sheet risk and a sign that the capital structure has been aggressive. Total assets are relatively stable (~$41.5B TTM), but the mix skews toward debt-funded financing, making the company more sensitive to earnings pressure and funding conditions.

Cash Flow

Cash generation is a relative strength. TTM operating cash flow is ~$3.7B and free cash flow is ~$2.9B, with TTM free cash flow up ~2.8% versus the latest annual period. Free cash flow conversion is solid (TTM free cash flow is ~0.78x net income), indicating earnings translate reasonably well into cash. The main drawback is that operating cash flow covers only a modest portion of total debt (coverage ~0.13x), so while cash flow is positive, leverage still constrains overall financial flexibility.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	56.23B	55.30B	53.56B	53.72B	62.91B	63.46B
Gross Profit	11.33B	11.05B	11.82B	11.51B	12.26B	13.41B
EBITDA	4.07B	4.09B	4.72B	4.47B	5.46B	8.61B
Net Income	2.51B	2.53B	2.77B	3.26B	3.13B	6.54B
Balance Sheet
Total Assets	41.53B	41.77B	39.91B	37.00B	38.49B	38.60B
Cash, Cash Equivalents and Short-Term Investments	3.15B	3.69B	3.24B	3.11B	3.15B	4.30B
Total Debt	9.70B	10.88B	10.90B	10.74B	12.29B	8.78B
Total Liabilities	38.13B	42.12B	41.23B	38.07B	41.52B	40.25B
Stockholders Equity	3.41B	-346.00M	-1.32B	-1.07B	-3.02B	-1.64B
Cash Flow
Free Cash Flow	2.88B	2.80B	3.16B	2.96B	3.67B	5.83B
Operating Cash Flow	3.71B	3.70B	3.75B	3.57B	4.46B	6.41B
Investing Cash Flow	-1.15B	-1.18B	-646.00M	-590.00M	-3.55B	-1.01B
Financing Cash Flow	-2.30B	-2.06B	-3.08B	-2.89B	-2.07B	-5.96B

HP Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 18.99 is below the 20-day moving average (MA) of 19.02, below the 50-day MA of 20.53, and below the 200-day MA of 24.46, indicating a bearish trend. The MACD of -0.55 indicates Negative momentum. The RSI at 45.72 is Neutral, neither overbought nor oversold. The STOCH value of 55.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HPQ.

HP Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	79 Outperform	$94.83B	28.08	41.27%	0.18%	-16.35%	316.56%
STX	70 Outperform	$88.94B	46.12	―	1.02%	31.56%	106.00%
NTAP	64 Neutral	$19.54B	16.57	112.59%	1.89%	2.64%	4.12%
DELL	62 Neutral	$98.13B	17.06	―	1.45%	10.81%	31.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SMCI	58 Neutral	$19.40B	24.05	13.19%	―	12.22%	-48.34%
HPQ	57 Neutral	$17.37B	7.17	―	5.09%	4.09%	-5.77%

HP Corporate Events

HP Appoints Bruce Broussard as Interim CEO

On February 3, 2026, HP Inc. announced a leadership transition in which long-time executive Enrique Lores stepped down as president, chief executive officer and board member at the end of February 2, 2026, to pursue another professional opportunity, and board member Bruce Broussard was appointed interim CEO effective February 3, 2026. Broussard, a veteran public-company leader with extensive experience at Humana and US Oncology/McKesson, will retain his board seat but relinquish key committee roles, and will receive a substantial interim CEO compensation package including monthly cash pay and a $7 million restricted stock grant that vests in 2027; meanwhile, HP’s board has formed a CEO search committee and hired an executive search firm, while the company reaffirmed its earnings and cash-flow outlook for the first quarter and full fiscal year 2026, signaling an intent to maintain strategic continuity and operational stability for investors and other stakeholders during the management transition.

The most recent analyst rating on (HPQ) stock is a Hold with a $20.50 price target. To see the full list of analyst forecasts on HP stock, see the HPQ Stock Forecast page.