HP INC (HPQ) Stock Fundamental Analysis
NYSE:HPQ - New York Stock Exchange, Inc. - US40434L1052 - Common Stock
Overall HPQ gets a fundamental rating of 5 out of 10. We evaluated HPQ against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While HPQ belongs to the best of the industry regarding profitability, there are concerns on its financial health. HPQ is valued quite cheap, but it does not seem to be growing. HPQ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year HPQ was profitable.
In the past year HPQ had a positive cash flow from operations.
HPQ had positive earnings in each of the past 5 years.
In the past 5 years HPQ always reported a positive cash flow from operatings.
1.2 Ratios
HPQ's Return On Assets of 6.95% is amongst the best of the industry. HPQ outperforms 80.65% of its industry peers.
Looking at the Return On Invested Capital, with a value of 31.55%, HPQ belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HPQ is significantly above the industry average of 16.39%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | N/A | ||
| ROIC | 31.55% |
ROA(3y)7.97%
ROA(5y)9.79%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.68%
ROIC(5y)36.41%
1.3 Margins
With a decent Profit Margin value of 5.18%, HPQ is doing good in the industry, outperforming 74.19% of the companies in the same industry.
In the last couple of years the Profit Margin of HPQ has remained more or less at the same level.
HPQ has a Operating Margin of 7.85%. This is in the better half of the industry: HPQ outperforms 70.97% of its industry peers.
In the last couple of years the Operating Margin of HPQ has grown nicely.
The Gross Margin of HPQ (22.07%) is worse than 70.97% of its industry peers.
In the last couple of years the Gross Margin of HPQ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.85% | ||
| PM (TTM) | 5.18% | ||
| GM | 22.07% |
OM growth 3Y-3.92%
OM growth 5Y1.94%
PM growth 3Y-20.32%
PM growth 5Y-0.69%
GM growth 3Y1.45%
GM growth 5Y3.02%
2. Health
2.1 Basic Checks
HPQ has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for HPQ has been reduced compared to 1 year ago.
HPQ has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HPQ has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.80, we must say that HPQ is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of HPQ (1.80) is comparable to the rest of the industry.
HPQ has a debt to FCF ratio of 3.06. This is a good value and a sign of high solvency as HPQ would need 3.06 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.06, HPQ is in the better half of the industry, outperforming 77.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.06 | ||
| Altman-Z | 1.8 |
ROIC/WACC2.81
WACC11.23%
2.3 Liquidity
HPQ has a Current Ratio of 0.72. This is a bad value and indicates that HPQ is not financially healthy enough and could expect problems in meeting its short term obligations.
HPQ's Current ratio of 0.72 is on the low side compared to the rest of the industry. HPQ is outperformed by 93.55% of its industry peers.
HPQ has a Quick Ratio of 0.72. This is a bad value and indicates that HPQ is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of HPQ (0.45) is worse than 93.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.42% over the past year.
The Earnings Per Share has been growing by 8.74% on average over the past years. This is quite good.
Looking at the last year, HPQ shows a decrease in Revenue. The Revenue has decreased by -0.30% in the last year.
Measured over the past years, HPQ shows a decrease in Revenue. The Revenue has been decreasing by -1.84% on average per year.
EPS 1Y (TTM)2.42%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%3.33%
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y-5.51%
Revenue growth 5Y-1.84%
Sales Q2Q%1.72%
3.2 Future
The Earnings Per Share is expected to grow by 5.13% on average over the next years.
The Revenue is expected to grow by 1.11% on average over the next years.
EPS Next Y6.58%
EPS Next 2Y5.55%
EPS Next 3Y6.28%
EPS Next 5Y5.13%
Revenue Next Year2.59%
Revenue Next 2Y2.75%
Revenue Next 3Y2.07%
Revenue Next 5Y1.11%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 9.72, the valuation of HPQ can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of HPQ indicates a rather cheap valuation: HPQ is cheaper than 90.32% of the companies listed in the same industry.
HPQ's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 9.12, which indicates a very decent valuation of HPQ.
Based on the Price/Forward Earnings ratio, HPQ is valued cheaper than 87.10% of the companies in the same industry.
HPQ is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.72 | ||
| Fwd PE | 9.12 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HPQ is valued cheaper than 90.32% of the companies in the same industry.
HPQ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HPQ is cheaper than 96.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.79 | ||
| EV/EBITDA | 7.32 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of HPQ may justify a higher PE ratio.
PEG (NY)1.48
PEG (5Y)1.11
EPS Next 2Y5.55%
EPS Next 3Y6.28%
5. Dividend
5.1 Amount
HPQ has a Yearly Dividend Yield of 3.58%.
Compared to an average industry Dividend Yield of 2.93, HPQ pays a better dividend. On top of this HPQ pays more dividend than 96.77% of the companies listed in the same industry.
HPQ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
5.2 History
The dividend of HPQ is nicely growing with an annual growth rate of 11.65%!
HPQ has paid a dividend for at least 10 years, which is a reliable track record.
HPQ has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.65%
Div Incr Years13
Div Non Decr Years33
5.3 Sustainability
HPQ pays out 38.74% of its income as dividend. This is a sustainable payout ratio.
HPQ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.74%
EPS Next 2Y5.55%
EPS Next 3Y6.28%
HP INC
NYSE:HPQ (1/21/2025, 7:01:46 PM)
After market: 32.96 +0.01 (+0.03%)32.95
+0.44 (+1.35%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners80.54%
Inst Owner Change0.03%
Ins Owners0.18%
Ins Owner Change4.47%
Market Cap30.90B
Analysts67.62
Price Target37.19 (12.87%)
Short Float %2.97%
Short Ratio3.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
Yearly Dividend1.12
Dividend Growth(5Y)11.65%
DP38.74%
Div Incr Years13
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.69%
Min EPS beat(2)-4.43%
Max EPS beat(2)-0.96%
EPS beat(4)1
Avg EPS beat(4)-1.6%
Min EPS beat(4)-4.43%
Max EPS beat(4)0.02%
EPS beat(8)2
Avg EPS beat(8)-0.67%
EPS beat(12)5
Avg EPS beat(12)0.2%
EPS beat(16)9
Avg EPS beat(16)3.25%
Revenue beat(2)1
Avg Revenue beat(2)-0.21%
Min Revenue beat(2)-0.5%
Max Revenue beat(2)0.07%
Revenue beat(4)2
Avg Revenue beat(4)-0.9%
Min Revenue beat(4)-3.75%
Max Revenue beat(4)0.59%
Revenue beat(8)2
Avg Revenue beat(8)-1.54%
Revenue beat(12)4
Avg Revenue beat(12)-1.5%
Revenue beat(16)7
Avg Revenue beat(16)-0.47%
PT rev (1m)0.23%
PT rev (3m)3.51%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-12.89%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.96%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.6%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.72 | ||
| Fwd PE | 9.12 | ||
| P/S | 0.58 | ||
| P/FCF | 9.79 | ||
| P/OCF | 8.24 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.32 |
EPS(TTM)3.39
EY10.29%
EPS(NY)3.61
Fwd EY10.96%
FCF(TTM)3.37
FCFY10.22%
OCF(TTM)4
OCFY12.13%
SpS57.11
BVpS-1.41
TBVpS-12.02
PEG (NY)1.48
PEG (5Y)1.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | N/A | ||
| ROCE | 37.44% | ||
| ROIC | 31.55% | ||
| ROICexc | 44.36% | ||
| ROICexgc | N/A | ||
| OM | 7.85% | ||
| PM (TTM) | 5.18% | ||
| GM | 22.07% | ||
| FCFM | 5.89% |
ROA(3y)7.97%
ROA(5y)9.79%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)31.68%
ROIC(5y)36.41%
ROICexc(3y)43.22%
ROICexc(5y)62.59%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)37.59%
ROCE(5y)43.67%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-19.23%
ROICexc growth 5Y-14.33%
OM growth 3Y-3.92%
OM growth 5Y1.94%
PM growth 3Y-20.32%
PM growth 5Y-0.69%
GM growth 3Y1.45%
GM growth 5Y3.02%
F-Score6
Asset Turnover1.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 3.06 | ||
| Debt/EBITDA | 1.65 | ||
| Cap/Depr | 71.33% | ||
| Cap/Sales | 1.11% | ||
| Interest Coverage | 9.53 | ||
| Cash Conversion | 74.5% | ||
| Profit Quality | 113.77% | ||
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.8 |
F-Score6
WACC11.23%
ROIC/WACC2.81
Cap/Depr(3y)81.46%
Cap/Depr(5y)78.41%
Cap/Sales(3y)1.17%
Cap/Sales(5y)1.09%
Profit Quality(3y)107.26%
Profit Quality(5y)108.55%
High Growth Momentum
Growth
EPS 1Y (TTM)2.42%
EPS 3Y-2.52%
EPS 5Y8.74%
EPS Q2Q%3.33%
EPS Next Y6.58%
EPS Next 2Y5.55%
EPS Next 3Y6.28%
EPS Next 5Y5.13%
Revenue 1Y (TTM)-0.3%
Revenue growth 3Y-5.51%
Revenue growth 5Y-1.84%
Sales Q2Q%1.72%
Revenue Next Year2.59%
Revenue Next 2Y2.75%
Revenue Next 3Y2.07%
Revenue Next 5Y1.11%
EBIT growth 1Y-0.5%
EBIT growth 3Y-9.21%
EBIT growth 5Y0.07%
EBIT Next Year17.67%
EBIT Next 3Y3.44%
EBIT Next 5Y1.51%
FCF growth 1Y6.58%
FCF growth 3Y-18.48%
FCF growth 5Y-4.54%
OCF growth 1Y4.98%
OCF growth 3Y-16.37%
OCF growth 5Y-4.23%