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US Equities · Finance research note

HPQ — HP Inc.

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Evidence and analysis

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 7.11%
Profit Margins 4.45%
Return on Assets 5.88%
Free Float 0.91B
Dividend Yield 5.24%
Short Int % Utilisation 11.56%

2.2 Growth

Metric Value
Revenue Growth 9.0%
Free Cash Flow 3.45B
EBITDA 6.31 (Ratio)
Enterprise Value 29.74B
EV/Revenue 0.52
EV/EBITDA 6.31

Revenue growth of 9.0% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 29.90%
Risk / Std Dev (Ann.)* 43.29%
1-Year Price Return* 18.38%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $30.11
52-Week Range $17.56 – $32.19
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $55.30B $53.56B
Net income Reported net income $2.53B $2.77B
Total assets Year-end reported balance $41.77B $39.91B
Shareholders’ equity Year-end reported balance $-346.00M $-1.32B
Net margin Net income ÷ revenue 4.57% 5.18%
Asset turnover Revenue ÷ total assets 1.3238x 1.3420x
Equity multiplier Total assets ÷ shareholders’ equity -120.7197x -30.1655x
ROE Net margin × asset turnover × equity multiplier -730.92% -209.75%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $55.30B
Prior annual revenue $53.56B
EBIT $3.22B
Tax rate 5.20%
NOPAT = EBIT × (1 − tax rate) $3.06B
Forecast start-growth basis 3.24%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $3.06B
Add: depreciation & amortisation $916.00M
Less: capital expenditure -$897.00M
Less/(add): working-capital cash-flow movement -$785.00M
Current unlevered FCFF $2.29B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 3.24% $3.15B $945.69M -$926.07M -$810.44M $2.36B $2.26B
2 3.06% $3.25B $974.59M -$959.43M -$835.21M $2.43B $2.12B
3 2.87% $3.34B $1.00B -$992.17M -$859.19M $2.50B $1.99B
4 2.69% $3.43B $1.03B -$1.02B -$882.26M $2.56B $1.86B
5 2.50% $3.52B $1.06B -$1.06B -$904.32M $2.62B $1.74B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.19
Cost of equity 11.28%
Pre-tax cost of debt 5.10%
WACC 9.45%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $38.60B
Implied terminal EV / EBITDA 8.09x
Terminal value as % of enterprise value 71.12%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $9.98B
Present value of terminal value $24.58B
Indicated enterprise value $34.56B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $34.56B
Less: gross interest-bearing debt $10.88B
Add: cash and equivalents $3.69B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $27.37B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 953,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $29.96
DCF indicative value per share $28.72
Indicative value vs. market price -4.15%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:36:48.662486 UTC; latest reported fiscal period: 2025-10-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -32.22% -28.36%
Adjusted R² 0.10 0.12
Annualised residual volatility 39.65% 38.96%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.83 (3.58) 1.00 (3.77)
Size (SMB) 0.65 (2.06) 0.36 (1.08)
Value (HML) 0.39 (1.43) -0.12 (-0.37)
Profitability (RMW) NM -0.10 (-0.37)
Investment (CMA) NM 1.32 (2.72)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

us-equitystockequityhpqinformation-technologytechnology-hardware,-storage--peripheralsnasdaq