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HP (HPQ)
NYSE:HPQ

HP (HPQ) AI Stock Analysis

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HP

HP

(NYSE:HPQ)

Rating:61Neutral
Price Target:
$26.00
▲(1.96%Upside)
The overall score reflects HP's solid revenue growth and strategic initiatives, tempered by financial stability concerns due to negative equity and declining cash flows. While valuation metrics are attractive, suggesting potential upside, the bearish technical indicators and challenges from tariff impacts and moderated future guidance weigh on the stock's outlook.
Positive Factors
Growth Drivers
The next-generation AI PC is set to be a new growth driver.
Operational Efficiency
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
Demand Challenges
The HOLD rating is based on weakening end-market demand and prolonged sluggish printing business performance.
Market Competition
Intense PC market competition may put pressure on its market share and profitability.
Tariff Impacts
HP Inc. reported financial results below expectations due to a significant impact from tariffs, affecting their margins negatively.

HP (HPQ) vs. SPDR S&P 500 ETF (SPY)

HP Business Overview & Revenue Model

Company DescriptionHP Inc. (HPQ) is a multinational information technology company headquartered in Palo Alto, California. The company operates in sectors including personal computing, printing, and imaging solutions. HP is renowned for its wide range of products such as laptops, desktops, printers, and related accessories, catering to both consumer and enterprise markets. The company is committed to innovation, sustainability, and providing technology solutions that empower individuals and businesses globally.
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 Key Performance Indicators (KPIs)

Any
Any
Earnings Before Tax by Segment
Earnings Before Tax by Segment
Shows profitability across different business segments, highlighting which areas are driving earnings and where there might be challenges or opportunities for growth.
Chart InsightsHP's Personal Systems segment shows a gradual recovery in earnings before tax, aligning with an 8% revenue increase driven by commercial PC sales. However, the Printing segment faces challenges with a decline in print revenue, impacted by weak demand in North America and China. Corporate Investments continue to drag on earnings, although slightly improving. The company is mitigating tariff impacts through manufacturing diversification and aims for significant cost savings by fiscal 2025, which could stabilize future profitability despite current macroeconomic uncertainties.
Data provided by:Main Street Data

HP Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q2-2025)
|
% Change Since: -5.17%|
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 demonstrates stable revenue and profitability margins but faces challenges with its balance sheet due to negative equity. While cash flow remains strong, recent declines in free cash flow warrant cautious monitoring. The company's leverage and declining cash flow could be potential risks, but its robust cash generation supports ongoing operations.
Income Statement
65
Positive
HP's income statement shows moderate performance. The TTM revenue of $54.3 billion reflects a slight growth of 1.38% compared to the previous year. Gross profit and net profit margins are stable with gross profit margin at 21.15% and net profit margin at 4.63%. However, both EBIT and EBITDA margins have slightly decreased over the TTM, indicating pressure on operating efficiency.
Balance Sheet
45
Neutral
The balance sheet reveals some financial instability due to negative stockholders' equity, which indicates a leveraged position. The debt-to-equity ratio is not meaningful due to the negative equity. With an equity ratio of -3.29%, HP's reliance on debt could pose a risk, although its total debt has reduced slightly over the recent periods.
Cash Flow
70
Positive
HP's cash flow statement is a positive aspect, with a robust operating cash flow of $3.46 billion in the TTM and a healthy free cash flow of $2.66 billion. The free cash flow to net income ratio is 1.06, highlighting strong cash generation capabilities relative to net income. However, the free cash flow has declined by 15.77% from the previous period, which could affect future financial flexibility.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue54.30B53.56B53.72B62.98B63.49B56.64B
Gross Profit11.49B11.82B11.51B12.34B13.42B10.44B
EBITDA4.30B4.71B4.46B5.45B8.60B4.26B
Net Income2.52B2.77B3.26B3.13B6.54B2.81B
Balance Sheet
Total Assets38.80B39.91B37.00B38.59B38.61B34.68B
Cash, Cash Equivalents and Short-Term Investments2.73B3.25B3.23B3.15B4.30B4.86B
Total Debt10.74B10.90B10.74B11.01B7.49B6.22B
Total Liabilities40.08B41.23B38.07B41.51B40.26B36.91B
Stockholders Equity-1.28B-1.32B-1.07B-2.92B-1.65B-2.23B
Cash Flow
Free Cash Flow2.66B3.16B2.96B3.67B5.83B3.74B
Operating Cash Flow3.46B3.75B3.57B4.46B6.41B4.32B
Investing Cash Flow-1.50B-646.00M-590.00M-3.55B-1.01B-1.02B
Financing Cash Flow-1.74B-3.08B-2.89B-2.07B-5.96B-2.97B

HP Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price25.50
Price Trends
50DMA
25.63
Negative
100DMA
27.13
Negative
200DMA
30.65
Negative
Market Momentum
MACD
-0.31
Negative
RSI
54.42
Neutral
STOCH
79.93
Neutral
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 25.5 is above the 20-day moving average (MA) of 24.62, below the 50-day MA of 25.63, and below the 200-day MA of 30.65, indicating a neutral trend. The MACD of -0.31 indicates Negative momentum. The RSI at 54.42 is Neutral, neither overbought nor oversold. The STOCH value of 79.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$21.18B18.63108.51%1.97%5.02%22.19%
76
Outperform
$18.11B154.959.76%10.85%30.85%
70
Outperform
$84.17B19.77-179.12%1.71%7.68%27.73%
WDWDC
63
Neutral
$22.08B12.1728.45%0.16%21.22%
63
Neutral
£569.62M24.70-6.00%2.44%3.52%-29.29%
HPHPQ
61
Neutral
$23.27B9.5584.33%4.73%2.08%-12.41%
STSTX
61
Neutral
$30.02B20.44-109.27%2.00%36.29%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HPQ
HP
25.50
-8.04
-23.97%
NTAP
NetApp
106.69
-21.10
-16.51%
STX
Seagate Tech
145.04
46.43
47.08%
WDC
Western Digital
63.84
5.17
8.81%
PSTG
Pure Storage
55.22
-8.47
-13.30%
DELL
Dell Technologies
121.73
-18.48
-13.18%

HP Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
HP Announces New Chief Accounting Officer Appointment
Neutral
Jun 25, 2025

On June 18, 2025, HP Inc. announced that Stephanie Liebman will be leaving her position as Global Controller to pursue an outside opportunity, effective September 12, 2025. Manpreet S. Grewal has been appointed as the new Chief Accounting Officer and Global Controller, effective July 14, 2025. Mr. Grewal brings experience from his previous roles at United States Steel Corporation and Covanta. Additionally, HP’s Board of Directors has adopted amendments to the company’s bylaws to align with recent changes in the General Corporation Law of the State of Delaware, affecting the inspection rights of stockholders and directors.

The most recent analyst rating on (HPQ) stock is a Hold with a $37.00 price target. To see the full list of analyst forecasts on HP stock, see the HPQ Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 12, 2025