WBAG:HPQ

Stock Analysis Report

Executive Summary

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.

Rewards

Trading at 33.3% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -5.5% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

Profit margins (5.4%) are lower than last year (9.1%)



Snowflake Analysis

Good value average dividend payer.


Similar Companies

Honeywell International

NYSE:HON

Share Price & News

How has HP's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HPQ has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.6%

HPQ

3.7%

AT Tech

-0.06%

AT Market


1 Year Return

2.9%

HPQ

17.3%

AT Tech

6.0%

AT Market

Return vs Industry: HPQ underperformed the Austrian Tech industry which returned 19.9% over the past year.

Return vs Market: HPQ underperformed the Austrian Market which returned 6% over the past year.


Shareholder returns

HPQIndustryMarket
7 Day2.6%3.7%-0.06%
30 Day6.8%2.5%-1.4%
90 Day25.8%10.6%-0.07%
1 Year6.4%2.9%19.0%17.3%9.8%6.0%
3 Yearn/a32.1%25.9%30.4%18.5%
5 Yearn/a127.1%97.8%69.7%45.9%

Price Volatility Vs. Market

How volatile is HP's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is HP undervalued compared to its fair value and its price relative to the market?

31.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HPQ (€19.26) is trading below our estimate of fair value (€28.89)

Significantly Below Fair Value: HPQ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HPQ is good value based on its PE Ratio (10.3x) compared to the Tech industry average (23x).

PE vs Market: HPQ is good value based on its PE Ratio (10.3x) compared to the Austrian market (14.7x).


Price to Earnings Growth Ratio

PEG Ratio: HPQ's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: HPQ has negative assets, so we can't compare its PB Ratio to the XE Tech industry average.


Next Steps

Future Growth

How is HP forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

-5.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HPQ's earnings are forecast to decline over the next 3 years (-5.5% per year).

Earnings vs Market: HPQ's earnings are forecast to decline over the next 3 years (-5.5% per year).

High Growth Earnings: HPQ's earnings are forecast to decline over the next 3 years.

Revenue vs Market: HPQ's revenue is expected to decline over the next 3 years (-0.6% per year).

High Growth Revenue: HPQ's revenue is forecast to decline over the next 3 years (-0.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HPQ's Return on Equity is forecast to be very high in 3 years time (2075.2%).


Next Steps

Past Performance

How has HP performed over the past 5 years?

3.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HPQ has high quality earnings.

Growing Profit Margin: HPQ's current net profit margins (5.4%) are lower than last year (9.1%).


Past Earnings Growth Analysis

Earnings Trend: HPQ's earnings have grown by 3.5% per year over the past 5 years.

Accelerating Growth: HPQ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HPQ had negative earnings growth (-40.8%) over the past year, making it difficult to compare to the Tech industry average (-4.2%).


Return on Equity

High ROE: HPQ's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is HP's financial position?


Financial Position Analysis

Short Term Liabilities: HPQ has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: HPQ has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: HPQ has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: HPQ's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: HPQ's debt is well covered by operating cash flow (90.6%).

Interest Coverage: HPQ's interest payments on its debt are well covered by EBIT (26.3x coverage).


Balance Sheet

Inventory Level: HPQ has a high level of physical assets or inventory.

Debt Coverage by Assets: HPQ has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is HP's current dividend yield, its reliability and sustainability?

3.19%

Current Dividend Yield


Upcoming Dividend Payment

Purchase HP before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.6%markettop25%4.2%industryaverage1.5%forecastin3Years3.4%

Current dividend yield vs market & industry

Notable Dividend: HPQ's dividend (3.28%) is higher than the bottom 25% of dividend payers in the Austrian market (1.6%).

High Dividend: HPQ's dividend (3.28%) is low compared to the top 25% of dividend payers in the Austrian market (4.17%).


Stability and Growth of Payments

Stable Dividend: HPQ's dividend payments have been volatile in the past 10 years.

Growing Dividend: HPQ's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.8%), HPQ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HPQ's dividends in 3 years are forecast to be well covered by earnings (35.3% payout ratio).


Next Steps

Management

What is the CEO of HP's salary, the management and board of directors tenure and is there insider trading?

1.4yrs

Average management tenure


CEO

Enrique Lores (53yo)

0.2yrs

Tenure

US$6,996,990

Compensation

Mr. Enrique J. Lores has been President, Chief Executive Officer and Director of HP Inc since November 1, 2019. He was the President of Imaging, Printing and Solutions at HP Inc. (also known as, Hewlett-Pa ...


CEO Compensation Analysis

Compensation vs Market: Enrique's total compensation ($USD7.00M) is above average for companies of similar size in the Austrian market ($USD3.76M).

Compensation vs Earnings: Enrique's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

1.4yrs

Average Tenure

54yo

Average Age

Experienced Management: HPQ's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Age and Tenure

5.0yrs

Average Tenure

60.5yo

Average Age

Experienced Board: HPQ's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sell€43,68527 Jun 19
Claire Bramley
EntityIndividual
Shares2,389
Max Price€18.29
Sell€366,05220 Jun 19
Kim Rivera
EntityIndividual
Role
Chief Legal Officer
President of Strategy & Business Management and Chief Legal Officer
Shares20,000
Max Price€18.30
Sell€279,68012 Jun 19
Claire Bramley
EntityIndividual
Shares15,819
Max Price€17.68
Sell€495,04012 Jun 19
Shumeet Banerji
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares28,000
Max Price€17.68

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Tracy Keogh (58yo)

    Chief Human Resources Officer

    • Tenure: 4.2yrs
    • Compensation: US$5.19m
  • Shane Wall (55yo)

    Chief Technology Officer

    • Bernard Meric

      Vice President of Europe and Managing Director of Europe

      • Karen Kahn

        Chief Communications Officer & Head of Communications

        • Tenure: 1.4yrs
      • Enrique Lores (53yo)

        CEO, President & Director

        • Tenure: 0.2yrs
        • Compensation: US$7.00m
      • Kim Rivera (50yo)

        President of Strategy & Business Management and Chief Legal Officer

        • Tenure: 4.2yrs
        • Compensation: US$5.28m
      • Dion Weisler (52yo)

        Senior Executive Advisor & Director

        • Tenure: 4.2yrs
        • Compensation: US$19.22m
      • Steve Fieler (57yo)

        Chief Financial Officer

        • Tenure: 1.5yrs
        • Compensation: US$3.75m
      • Vikrant Batra

        Chief Marketing Officer

        • Tenure: 1.4yrs
      • Beth Howe

        Head of Investor Relations


        Board Members

        • Robert Bennett (61yo)

          Independent Director

          • Tenure: 6.5yrs
          • Compensation: US$327.26k
        • Stacey Mobley (74yo)

          Independent Director

          • Tenure: 5yrs
          • Compensation: US$308.27k
        • Chip Bergh (61yo)

          Independent Chairman of the Board

          • Tenure: 2.5yrs
          • Compensation: US$543.10k
        • Stephanie Burns (64yo)

          Independent Director

          • Tenure: 4.2yrs
          • Compensation: US$328.26k
        • Subra Suresh (62yo)

          Independent Director

          • Tenure: 5yrs
          • Compensation: US$310.27k
        • Mary Citrino (60yo)

          Independent Director

          • Tenure: 5yrs
          • Compensation: US$340.59k
        • Enrique Lores (53yo)

          CEO, President & Director

          • Tenure: 0.2yrs
          • Compensation: US$7.00m
        • Shumeet Banerji (60yo)

          Independent Director

          • Tenure: 9yrs
          • Compensation: US$323.26k
        • Stacy Brown-Philpot (43yo)

          Independent Director

          • Tenure: 5yrs
          • Compensation: US$312.27k
        • Dion Weisler (52yo)

          Senior Executive Advisor & Director

          • Tenure: 4.2yrs
          • Compensation: US$19.22m

        Company Information

        HP Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: HP Inc.
        • Ticker: HPQ
        • Exchange: WBAG
        • Founded: 1939
        • Industry: Technology Hardware, Storage and Peripherals
        • Sector: Tech
        • Market Cap: US$31.868b
        • Listing Market Cap: US$28.742b
        • Shares outstanding: 1.45b
        • Website: https://www.hp.com

        Number of Employees


        Location

        • HP Inc.
        • 1501 Page Mill Road
        • Palo Alto
        • California
        • 94304
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        HPQSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
        HPQNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
        HPQ *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
        7HPDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
        HWPXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
        0J2ELSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
        HPQ-UETLX (Eurotlx)YesCommon StockITEURJan 1968
        HPQSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
        HPQWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
        HPQBASE (Buenos Aires Stock Exchange)CEDEAR EACH 1 REP 1 USD0.01ARARSJul 2001
        HPQB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM USD0.01BRBRLAug 2012
        HPQ.WINYSE (New York Stock Exchange)COM USD0.01USUSDOct 2015
        HPQSWX (SIX Swiss Exchange)COM USD0.01CHCHFOct 2015

        Biography

        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 other related accessories, software, support, and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions, and services, as well as scanning devices. The Corporate Investments segment includes HP Labs and business incubation projects. It serves individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health, and education sectors. HP Inc. has a strategic alliance with Siemens AG; and collaboration with SmileDirectClub. 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. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/23 23:07
        End of Day Share Price2020/01/23 00:00
        Earnings2019/10/31
        Annual Earnings2019/10/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.