HP (HPQ): Exploring the Stock’s Valuation After Recent Share Price Weakness

HP (HPQ) stock has slipped recently, with shares closing at $26.17 and showing muted performance over the past month. Investors may be weighing the company's modest revenue and net income growth as they consider the valuation ahead.

See our latest analysis for HP.

HP’s share price has struggled for momentum in 2024, with a year-to-date decline of 19.4% and a one-year total shareholder return at -27.1%. While modest recent moves reflect some ongoing uncertainty, the longer-term five-year total return of 63.3% highlights the stock’s potential if sentiment shifts back in its favor.

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With shares lagging the broader market and forecasts indicating only modest earnings growth, investors are left to consider whether HP is being undervalued in today’s market or if the outlook is already fully reflected in the current price.

Most Popular Narrative: 7.5% Undervalued

HP’s most widely followed narrative sees the stock’s fair value at $28.28, a premium over its recent $26.17 close. Behind this assessment is a view that consistent digital transformation and operational initiatives could change the company’s fortunes.

Expansion and momentum in recurring digital and managed service models (such as Device-as-a-Service and consumer print subscriptions) are increasing the share of predictable, higher-margin revenue streams. This supports future earnings and operational stability.

Read the complete narrative.

There is one assumption at the heart of this price target, and it is not just about modest growth. Future profit margins and recurring revenues play a starring role. Want to know just how big an earnings boost is forecast? Read on for the narrative’s inside numbers.

Result: Fair Value of $28.28 (UNDERVALUED)

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

However, structural declines in HP’s core print market and fierce price competition could easily disrupt the current optimistic outlook for the company’s future.

Find out about the key risks to this HP narrative.

Build Your Own HP Narrative

If you prefer a hands-on approach or believe there’s another story behind the numbers, you can shape your own perspective in just a few minutes with 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.

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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.

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