HP Inc. Fundamental Analysis (NYSE: HPQ)
HP Inc. (NYSE: HPQ) shows moderate financial fundamentals with a PE ratio of 11.86, profit margin of 4.14%, and ROE of -7.27%. The company generates $58.9B in annual revenue with moderate year-over-year growth of 3.24%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 433.1/100 based on profitability, valuation, growth, and balance sheet metrics. The A grade reflects excellent fundamentals and strong overall stability.
Fundamental Health Score
We analyze HPQ's fundamental strength across five key dimensions:
Efficiency Score
WeakHPQ struggles to generate sufficient returns from assets.
Valuation Score
ExcellentHPQ trades at attractive valuation levels.
Growth Score
WeakHPQ faces weak or negative growth trends.
Financial Health Score
ModerateHPQ shows balanced financial health with some risks.
Profitability Score
WeakHPQ struggles to sustain strong margins.
Key Financial Metrics
Is HPQ Expensive or Cheap?
P/E Ratio
HPQ trades at 11.86 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HPQ's PEG of -2.74 indicates potential undervaluation.
Price to Book
The market values HP Inc. at -313.86 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.00 times EBITDA. This is generally considered low.
How Well Does HPQ Make Money?
Net Profit Margin
For every $100 in sales, HP Inc. keeps $4.14 as profit after all expenses.
Operating Margin
Core operations generate 5.64 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-7.27 in profit for every $100 of shareholder equity.
ROA
HP Inc. generates $5.36 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
HP Inc. generates limited operating cash flow of $4.65B, signaling weaker underlying cash strength.
Free Cash Flow
HP Inc. produces free cash flow of $3.86B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.22 in free cash annually.
FCF Yield
HPQ converts 13.59% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.86
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.74
vs 25 benchmark
P/B Ratio
Price to book value ratio
-313.86
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.49
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-112.38
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.79
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-7.27
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.28
vs 25 benchmark
How HPQ Stacks Against Its Sector Peers
| Metric | HPQ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.86 | 33.56 | Better (Cheaper) |
| ROE | -727.30% | 815.00% | Weak |
| Net Margin | 4.14% | -1149.00% (disorted) | Weak |
| Debt/Equity | -112.38 | 0.67 | Strong (Low Leverage) |
| Current Ratio | 0.79 | 12.44 | Weak Liquidity |
| ROA | 5.36% | 227.00% | Weak |
HPQ outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews HP Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
45.82%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
34.19%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
27.94%
Industry Style: Growth, Innovation, High Beta
High Growth