HP shares moved -19.5% over the last 52 weeks, with a high of $41.47 and a low of $24.08. During this time, the stock lagged the S&P 500 index by -9.6%. As of January 2022, the company's 50-day average price is $28.28. 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 large-cap Technology company has 58,000 full time employees and is based in Palo Alto, CA. HP has returned a 3.4% dividend yield over the last 12 months.
Revenues and Margins With a Positive Growth Rate:
| 2019-10-31 | 2020-10-31 | 2021-10-31 | 2022-10-31 | |
|---|---|---|---|---|
| Revenue (MM) | $58,756 | $56,639 | $63,487 | $62,983 |
| Revenue Growth | n/a | -3.6% | 12.09% | -0.79% |
| Gross Margins | 19.0% | 18.4% | 21.1% | 19.6% |
| Gross Margins Growth | n/a | -3.16% | 14.67% | -7.11% |
| Operating Margins | 5.1% | 6.6% | 8.9% | 8.3% |
| Operating Margins Growth | n/a | 29.41% | 34.85% | -6.74% |
| Earnings Per Share | $2.07 | $2.0 | $5.33 | $3.05 |
| EPS Growth | n/a | -3.38% | 166.5% | -42.78% |
| Free Cash Flow (MM) | $3,983 | $3,736 | $5,827 | $3,672 |
| FCF Growth | n/a | -6.2% | 55.97% | -36.98% |
| Capital Expenditures (MM) | -$671 | -$580 | -$582 | -$791 |
| Net Debt / EBITDA | 0.16 | 0.34 | 0.54 | 1.34 |
HP Is Currently Fairly Valued:
Compared to the Technology sector's average of 26.5, HP has a trailing twelve month P/E ratio of 9.6 and, according to its EPS guidance of 3.67, an expected P/E ratio of 8.0. HP's PEG ratio is 0.27 based on its 35.0% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by HP's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.73, which still suggests that company's shares are possibly undervalued.
HP's elevated P/B ratio notwithstanding, the company's strong cash flows and healthy debt levels factor towards it being fairly valued.
HP Is the Subject of Mixed Market Indicators:
16 analysts are following HP and have set target prices ranging from $24 to $37 per share. On average, they have given the company a rating of hold. At the current price of $29.23, HPQ is trading -0.37% away from its average analyst target price of $29.34 per share, implying an analyst consensus of some upside potential for the stock.
The company has an average amount of shares sold short since 3.4% of the company's shares are tied to short positions. Institutions own 83.4% of HP's shares, while the insider ownership rate stands at 0.21%. The biggest shareholder is Berkshire Hathaway, Inc with a 11% stake in the company worth approximately $3,053,834,455.
