A Look at HP’s Valuation Following New 3D Printing Partnership and AI-Driven Product Debut

HP (HPQ) just entered a cooperation agreement with Continuum Powders, highlighting its push to develop advanced metal alloys for additive manufacturing. At the same time, HP’s new lineup of AI-driven products aims to strengthen its position in next-generation technology.

See our latest analysis for HP.

HP has had a busy stretch, from launching smart new products to partnering with Continuum Powders for innovation in metal 3D printing. However, the company’s 1-year total shareholder return sits at -28.2%, underscoring that near-term share price momentum has faded. Long-term returns over five years remain solidly positive at 53.9%. Investors eyeing the next catalyst should watch to see whether recent strategic moves can rebuild momentum.

If you’re interested in what’s driving the tech sector forward, now’s a great moment to discover See the full list for free.

With HP trading at a visible discount to analyst targets and below industry valuations, the big question is whether these factors signal an undervalued opportunity or if the market has already considered the company’s future growth prospects.

Most Popular Narrative: 8.6% Undervalued

HP is trading at $25.55, which is notably below the most widely followed fair value estimate of $27.97. This has investors questioning whether the gap points to overlooked upside in the current valuation narrative.

Persistent structural cost reduction initiatives, including manufacturing diversification outside China, AI-enabled automation, and a $2B annualized savings target, are expected to drive sustainable improvements in net margins and bottom-line earnings resilience. HP's focus on responsible innovation and sustainability, exemplified by significant recycled content in devices and advances toward net zero, aligns with growing enterprise and consumer preference for eco-friendly technology. This approach strengthens competitive positioning and supports revenue and margin growth over the long term.

Read the complete narrative.

Curious why the market hasn't closed this valuation gap? The foundation of this narrative is in bold projections for cost savings and shifting business models. Analysts see a mix of margin expansion and recurring revenue as key elements for HP’s next phase. What exactly are these forecasts, and how do they support this price target? Unlock the full story behind the numbers.

Result: Fair Value of $27.97 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, structural declines in HP's print segment and tough competition in hardware could derail earnings momentum if new business areas do not scale quickly enough.

Find out about the key risks to this HP narrative.

Build Your Own HP Narrative

Feel free to dig into the details yourself and craft a perspective that fits your own analysis. You can build a narrative in just a couple of minutes. Do it your way

A great starting point for your HP research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Open the door to fresh opportunities by checking out exclusive lists of stocks tailored for every investor. Don’t let the next big winner pass you by.

• Uncover early-stage companies with potential by checking out these 3581 penny stocks with strong financials. Robust financials set top contenders apart from the crowd.
• Tap into future healthcare breakthroughs with these 33 healthcare AI stocks, and see which firms are fusing medical innovation and artificial intelligence for tomorrow’s solutions.
• Power up your income strategy by pursuing these 19 dividend stocks with yields > 3%, connecting with companies offering consistently strong dividend yields exceeding 3%.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com