Now trading at a price of $29.5, HP has moved 0.7% so far today.
HP returned gains of 8.0% last year, with its stock price reaching a high of $33.9 and a low of $24.08. Over the same period, the stock underperformed the S&P 500 index by -8.0%. As of April 2023, the company's 50-day average price was $31.74. 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. Based in Palo Alto, CA, the large-cap Technology company has 58,000 full time employees. HP has offered a 3.5% dividend yield over the last 12 months.
EPS Growth Achieved Primarily Through Stock Repurchases:
| 2017-12-14 | 2018-12-13 | 2020-02-27 | 2020-12-10 | 2021-12-09 | 2022-12-06 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $52,056 | $58,472 | $58,756 | $56,639 | $63,487 | $62,983 |
| Gross Margins | 18.0% | 18.0% | 19.0% | 18.0% | 21.0% | 20.0% |
| Operating Margins | 7% | 7% | 7% | 7% | 9% | 8% |
| Net Margins | 5.0% | 9.0% | 5.0% | 5.0% | 10.0% | 5.0% |
| Net Income (MM) | $2,526 | $5,327 | $3,152 | $2,844 | $6,503 | $3,203 |
| Earnings Per Share | $1.48 | $3.26 | $2.07 | $2.0 | $5.94 | $3.05 |
| EPS Growth | n/a | 120.27% | -36.5% | -3.38% | 197.0% | -48.65% |
| Diluted Shares (MM) | 1,702 | 1,634 | 1,524 | 1,420 | 1,094 | 1,050 |
| Free Cash Flow (MM) | $4,010 | $4,902 | $5,325 | $4,893 | $6,991 | $5,228 |
| Capital Expenditures (MM) | -$333 | -$374 | -$671 | -$577 | -$582 | -$765 |
| Net Current Assets (MM) | -$14,003 | -$13,874 | -$14,483 | -$16,261 | -$18,090 | -$21,704 |
| Long Term Debt (MM) | $6,747 | $4,524 | $4,780 | $5,543 | $6,386 | $10,796 |
| Net Debt / EBITDA | 0.21 | 0.18 | 0.12 | 0.29 | 0.5 | 1.3 |
HP has weak revenue growth and a flat capital expenditure trend, weak operating margings with a stable trend, and irregular cash flows. We also note that the company has healthy leverage working in its favor. However, the firm suffers from slimmer gross margins than its peers and good EPS growth resulting mainly from stock repurchases.
HP Is Fairly Priced at Current Levels:
HP has a trailing twelve month P/E ratio of 11.9, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $3.48, the company has a forward P/E ratio of 9.1. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 10.3%. On this basis, the company's PEG ratio is 1.15, which shows that it is fairly priced.
HP Has an Average Rating of Hold:
The 15 analysts following HP have set target prices ranging from $23.0 to $39.0 per share, for an average of $29.77 with a hold rating. As of April 2023, the company is trading 6.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.
HP has a very low short interest because 1.5% of the company's shares are sold short. Institutions own 80.2% of the company's shares, and the insider ownership rate stands at 0.2%, suggesting a small amount of insider investors. The largest shareholder is Berkshire Hathaway, Inc, whose 12% stake in the company is worth $3,567,503,468.
