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If you are wondering whether HP's current share price offers value or just more volatility, starting with a clear view of what you are paying for each dollar of its business can help frame the decision.
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At a last close of US$19.76, the stock has seen a 0.9% move over the past week and 1.6% over the past month, set against a year to date return of a 10.7% decline and a 1 year return of an 18.2% decline.
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These price moves sit alongside ongoing attention on HP's positioning in the PC and printing markets and how it is competing within the broader tech sector. Recent commentary has focused on how demand patterns, cost management, and capital allocation choices might influence investors' views on the stock.
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HP currently has a valuation score of 5 out of 6 . This sets the stage for a closer look at traditional valuation tools like P/E and discounted cash flow, followed by a broader view later in the article on how to interpret those signals alongside a more holistic take on value.
Find out why HP's -18.2% return over the last year is lagging behind its peers.
Approach 1: HP Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model estimates what a business could be worth by projecting its future cash flows and discounting them back to today using a required rate of return. It is essentially a way of asking what those future cash flows are worth in current dollars.
For HP, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The company’s latest twelve month free cash flow stands at about US$2.97b. Analyst inputs extend out to 2030, where free cash flow is projected at US$3.08b, with further annual figures beyond the first few years extrapolated by Simply Wall St rather than based on additional analyst forecasts.
When all those projected cash flows are discounted back to today and aggregated, the model arrives at an estimated intrinsic value of US$42.85 per share. Compared with the recent share price of US$19.76, this implies the stock is 53.9% undervalued on this DCF view.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests HP is undervalued by 53.9%. Track this in your watchlist or portfolio , or discover 53 more high quality undervalued stocks .
Approach 2: HP Price vs Earnings
P/E is a common way to value profitable companies because it links what you pay for each share to the earnings that company is currently generating. In general, higher growth expectations or lower perceived risk can support a higher P/E, while slower growth or higher risk tend to justify a lower P/E.
HP currently trades on a P/E of 7.20x. That sits well below the broader Tech industry average P/E of 23.45x and also below the peer group average P/E of 49.26x. On simple comparisons, the stock trades at a lower multiple than both its industry and direct peers.
Simply Wall St’s Fair Ratio for HP is 20.27x. This is a proprietary estimate of what P/E might be reasonable after considering factors such as earnings growth, profit margins, the Tech industry context, the company’s market cap and specific risk profile. Because it builds these elements into a single number, the Fair Ratio aims to give a more tailored reference point than a basic check against industry or peer averages.
Comparing HP’s current P/E of 7.20x with the Fair Ratio of 20.27x suggests the shares trade below this tailored reference point on an earnings multiple basis.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your HP Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you attach a clear story about HP to the numbers by linking assumptions about future revenue, earnings and margins to a forecast and a fair value. These update automatically when fresh news or earnings arrive, giving you an accessible tool to compare that fair value with the current share price, whether you lean toward a cautious view closer to US$16.00 or a more optimistic view nearer US$25.18. This helps you judge which version of HP’s future you find more convincing and decide how you might want to respond.
For HP, here are previews of two leading HP Narratives for you to consider:
🐂 HP Bull Case
Fair value in this bullish narrative: US$25.18 per share.
At a last close of US$19.76, that is about 21% below this fair value estimate.
Revenue growth assumption: 2.31% a year.
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AI focused PCs, the Humane acquisition and CosmOS platform, and HP's Future of Work offerings are presented as key drivers for both revenue and margins.
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Analysts in this camp base their view on earnings of about US$3.2b by 2029, a P/E of 8.8x on those earnings, and ongoing share count reduction.
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They still highlight risks around pricing in China, tariffs, commodity costs and execution on AI PCs, so the upside case depends on HP delivering on these efforts.
🐻 HP Bear Case
Fair value in this bearish narrative: US$16.00 per share.
At a last close of US$19.76, that is about 24% above this fair value estimate.
Revenue growth assumption: 1.08% annual decline.
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AI investment and the Humane assets are included, but the focus is on whether these are enough to offset memory cost pressure, softer PC demand and tariff risk.
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This view is based on earnings of about US$2.4b by 2029, a lower P/E of 7.4x, and the idea that current earnings expectations may still be too high.
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Competitive pricing, especially in China, weaker consumer demand and geopolitical factors are treated as ongoing headwinds that could keep margins under pressure.
Your job as an investor is to decide which set of assumptions feels closer to how you see HP's future, then check how that aligns with your own time horizon, risk tolerance and portfolio mix.
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for HP on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
Do you think there's more to the story for HP? Head over to our Community to see what others are saying!
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.
Companies discussed in this article include HPQ .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
