HP Inc. (HPQ) | Investment Case

1. Company Snapshot

1.a. 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.

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1.b. Last Insights on HPQ

HP Inc.'s recent performance was negatively impacted by weak guidance and layoffs announced during its Q4 earnings release. Despite a 4% year-over-year revenue growth, driven by an 8% increase in Personal Systems revenue, the company's Printing segment declined. HP's cost-cutting and AI-focused restructuring efforts are underway, with a strong free cash flow and a rising dividend yield of 4.76%. The company's AI PC growth and market share gains are notable, but macro pressures and printing declines partly offset these positives.

1.c. Company Highlights

Last Price	25.9
Change Percentage	2.82%
Open	25.17
Previous Close	25.19
Market Cap ( Millions)	24209
Volume	8701780
Year High	36.81
Year Low	21.21
M A 50	26.16
M A 200	26.68

FCF Yield	12.38%
Dividend Yield	4.47%
ROE	2293.88%
Debt / Equity	261.95%
Net Debt / EBIDTA	151.64%
Price To Book	6.58
Price Earnings Ratio	9.61
Price To FCF	8.08
Price To sales	0.44
EV / EBITDA	7.67

2. HP Inc. Delivers Sixth Consecutive Quarter of Revenue Growth

HP Inc.'s Q4 2025 revenue grew 4% year over year, driven by an 8% increase in Personal Systems revenue, with non-GAAP EPS coming in at $0.93, beating estimates of $0.91. The company's Personal Systems segment delivered worldwide PC market share gains, driven by commercial and consumer premium and workstations. For the full year, revenue grew 3%, with key growth areas growing double-digit year over year. Operating profits declined due to trade-related costs, but increased double-digit from the first half to the second half. The company generated $1.5 billion in free cash flow and returned $800 million to shareholders through dividends and share repurchases in Q4.

Publication Date: Nov -26

                                    📋 Highlights
                                    Revenue Growth & Share Gains::
                                                Q4 2025 revenue grew 4% YoY, with Personal Systems up 8% (driven by commercial/consumer premium PCs and workstations), marking the sixth consecutive quarter of revenue growth.
Print Decline & Strategic Adjustments::
                                                Print revenue fell 4% due to market softness, but HP aims to outperform industry growth in 2026 via big tank, office, and 3D printing share gains, targeting low single-digit Print revenue growth.
Cost Savings & Workforce Reductions::
                                                Surpassed $1.4B cost savings target with $2.2B in annualized gross savings, achieving $300M by 2026. Plans include $1B in savings over three years, with 4,000–6,000 workforce reductions.
Free Cash Flow & Shareholder Returns::
                                                Generated $1.5B in Q4 free cash flow ($2.9B annually), returning $1.9B to shareholders via dividends/share repurchases, including a raised dividend of $0.30/share.
AI & Operational Shifts::
                                                AI PC penetration exceeds 30%, with 17% internal productivity gains. HP plans AI integration into operations and a shift to recurring revenue (e.g., subscriptions, software-as-a-service) for higher-margin stability.

                                

Segment Performance

In Personal Systems, revenue grew 8%, driven by commercial and consumer premium and workstations. The company expects revenue to be stronger in the second half of the year, driven by normal seasonality and pricing, with operating margin in the 5% to 6% range in the first half. In Print, revenue declined 4% due to market softness and delayed purchasing decisions, but HP anticipates low single-digit revenue growth, with supplies revenue down low single digits in constant currency.

Guidance and Outlook

For fiscal year 2026, HP expects Personal Systems revenue to grow low single-digit, driven by Windows 11 refresh, AIPCs, and pricing. The company aims to grow slightly faster than industry projections in Print, driven by share gains in big tanks, office, and 3D printing. HP expects to achieve $1 billion in cost savings over three years, with approximately $300 million realized by 2026, and estimates associated restructuring charges of around $650 million.

Valuation and Dividend Yield

With a P/E Ratio of 9.02 and a Dividend Yield of 4.76%, HP's valuation appears reasonable. The company's ROIC of 22.53% indicates strong profitability. The EV/EBITDA ratio of 7.3 suggests that HP's enterprise value is reasonable relative to its earnings. Analysts estimate next year's revenue growth at 1.7%, which is relatively modest. HP has raised its quarterly dividend to $0.30 per share, indicating a commitment to returning value to shareholders.

Memory Price Environment and Mitigation

HP has identified a headwind of $0.30 on EPS due to memory costs, but is taking actions to mitigate this impact, including pricing adjustments. The company prioritizes units with higher margins and expects AI PC dynamics to continue. With a solid position in the supply chain and long-term agreements with key suppliers, HP is well-equipped to manage the current memory cycle.

3. NewsRoom

Groupe la Francaise Raises Stock Holdings in HP Inc. $HPQ

Dec -04

Source: defenseworld.net

HP Inc. (HPQ) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

Xsolla Advances Global Gaming Education and Innovation in Collaboration With HP

Dec -02

Source: businesswire.com

Blueshift Asset Management LLC Purchases 13,688 Shares of HP Inc. $HPQ

Dec -02

Source: defenseworld.net

Consumer Tech News (Nov 24-28): Lawmakers Target Meta Over Alleged Fraudulent Ads, U.S. Pushes Taiwan To Boost Chipmaking Investment In America & More

Nov -30

Source: feeds.benzinga.com

Micron (MU) Stock Rises as AI Boom Sparks Fresh Wave of Chip Price Hikes

Nov -28

Source: gurufocus.com

First Look: CME outage, Black Friday shifts, AI job impact

Nov -28

Source: gurufocus.com

Coldstream Capital Management Inc. Buys 2,165 Shares of HP Inc. $HPQ

Nov -28

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.27%)

6. Segments

Personal Systems

Expected Growth: 2.5%

The 2.5% growth in HP Inc.'s Personal Systems segment is driven by increased demand for premium laptops, desktops, and workstations. Strong sales of gaming PCs, fueled by the rise of esports, and growth in commercial PCs due to enterprise refresh cycles, contribute to this modest growth. Additionally, HP's innovation in convertible and 2-in-1 devices supports the segment's expansion.

Printing

Expected Growth: 1.8%

HP Inc.'s printing segment growth of 1.8 is driven by increasing demand for 3D printing, strong performance in commercial and industrial printing, and a recovering global economy. Additionally, HP's innovative product offerings and expanding services portfolio contribute to its growth momentum.

Corporate Investments

Expected Growth: 3.2%

HP Inc.'s corporate investments growth of 3.2% is driven by strategic acquisitions, increased demand for enterprise hardware and software, and a focus on emerging technologies like cloud computing, cybersecurity, and data analytics. This growth is also attributed to management's efforts to improve operational efficiency and expand into new markets.

Other

Expected Growth: 1.2%

HP Inc.'s growth is driven by strong demand for PCs, printers, and gaming products. The company's focus on innovation, particularly in 3D printing and HP Z workstation, contributes to its growth. Additionally, HP's strategic acquisitions and partnerships, such as its deal with Microsoft, enhance its offerings and expand its customer base, fueling growth.

7. Detailed Products

HP Envy Laptops

A line of consumer laptops known for their sleek designs, vibrant displays, and robust performance for everyday tasks and entertainment.

HP Pavilion Gaming Laptops

A series of gaming laptops offering powerful processors, high-end graphics cards, and customizable features for an immersive gaming experience.

HP Spectre Ultrabooks

An elite line of ultra-portable laptops focused on thin and light designs, long battery life, and premium features.

HP EliteBook Business Laptops

A range of business laptops built for enterprise use, offering security, manageability, and durability for professional environments.

HP ProBook Business Laptops

Business-focused laptops providing a balance of performance, security, and value, designed for small to medium-sized businesses.

HP DeskJet Printers

A line of affordable inkjet printers for home and small office use, offering easy printing, scanning, and copying capabilities.

HP LaserJet Printers

A series of laser printers known for their high-speed, high-volume printing, and durability, suitable for demanding office environments.

HP OfficeJet Printers

Multifunction printers combining printing, scanning, and faxing in one device, aimed at small businesses and home offices.

HP Z-Series Workstations

High-performance workstations engineered for professional use in video editing, 3D rendering, engineering, and other compute-intensive tasks.

HP Monitors

A wide range of monitors from basic models for everyday use to high-end displays with advanced features like 4K resolution and curved screens.

8. HP Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

HP Inc. operates in a highly competitive market with various substitutes available for its products. However, HP's strong brand reputation and diversified product portfolio mitigate the threat. The increasing demand for digital solutions and cloud-based services could potentially increase the threat of substitutes, but HP's efforts to innovate and adapt to changing market trends help to neutralize this threat.

Bargaining Power Of Customers

HP Inc.'s customers have a significant bargaining power due to the availability of various alternatives in the market. The customers can easily switch to competitors' products, which puts pressure on HP to maintain competitive pricing and provide high-quality products. Additionally, the increasing demand for customized solutions and services gives customers more negotiating power.

Bargaining Power Of Suppliers

HP Inc. has a large and diversified supplier base, which reduces the bargaining power of individual suppliers. The company has a strong procurement strategy and long-term relationships with its suppliers, which enables it to negotiate favorable terms and prices. Additionally, the availability of alternative suppliers further decreases the bargaining power of HP's suppliers.

Threat Of New Entrants

The threat of new entrants in HP Inc.'s market is relatively low due to high barriers to entry, such as significant investments required in research and development, marketing, and distribution. Additionally, HP's strong brand reputation and established customer relationships make it challenging for new entrants to gain traction in the market.

Intensity Of Rivalry

The technology industry is highly competitive, and HP Inc. faces intense rivalry from established players such as Dell, Lenovo, and Apple. The competition is driven by factors such as pricing, product features, and innovation, which puts pressure on HP to continuously invest in R&D and marketing to maintain its market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	113.82%
Debt Cost	6.58%
Equity Weight	-13.82%
Equity Cost	10.73%
WACC	6.01%
Leverage	-823.81%

11. Quality Control: HP Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

A-Score: 5.2/10

Value: 8.2

Growth: 3.7

Quality: 4.8

Yield: 7.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

NetApp

A-Score: 5.2/10

Value: 3.4

Growth: 5.8

Quality: 7.2

Yield: 4.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

Arista Networks

A-Score: 5.0/10

Value: 0.0

Growth: 9.4

Quality: 8.5

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

1-Year Total Return ->

Dell Technologies

A-Score: 4.7/10

Value: 5.3

Growth: 4.0

Quality: 4.6

Yield: 3.0

Momentum: 7.0

Volatility: 4.0

1-Year Total Return ->

Western Digital

A-Score: 4.5/10

Value: 2.3

Growth: 3.4

Quality: 7.1

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

Super Micro Computer

A-Score: 4.4/10

Value: 3.3

Growth: 9.9

Quality: 5.6

Yield: 0.0

Momentum: 6.5

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-6.55%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.01%

HP Inc. - US40434L1052

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HPQ

1.c. Company Highlights

Higher Yield

Less Volatile

Cheaper

Revenues Miss

Earnings Beats

Revenues Beats

Earnings Miss

Medium Volatility

Average Quality

Fairly Valued

Average Growth

Stable Momentum

Lower Quality

Weak Momentum

2. HP Inc. Delivers Sixth Consecutive Quarter of Revenue Growth

Segment Performance

Guidance and Outlook

Valuation and Dividend Yield

Memory Price Environment and Mitigation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.27%)

6. Segments

Personal Systems

Expected Growth: 2.5%

Printing

Expected Growth: 1.8%

Corporate Investments

Expected Growth: 3.2%

Other

Expected Growth: 1.2%

7. Detailed Products

HP Envy Laptops

HP Pavilion Gaming Laptops

HP Spectre Ultrabooks

HP EliteBook Business Laptops

HP ProBook Business Laptops

HP DeskJet Printers

HP LaserJet Printers

HP OfficeJet Printers

HP Z-Series Workstations

HP Monitors

8. HP Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: HP Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

25.9$

12.e Scoring ^Insights

12.f DCF ^BETA