Simply Wall St
4 min read
HP (HPQ) just coupled a strong revenue and earnings beat with a fresh wave of AI-focused product launches, giving investors new information on both the current business mix and its longer-term AI ambitions.
Recent trading has been choppy for HP. The share price is down 8.23% over the past 30 days after a 20.81% gain across 90 days and a 35.67% year to date share price return. The 1 year total shareholder return sits at 15.23%, suggesting momentum that has cooled near term as investors reassess the stronger earnings print and fresh AI product push.
Scan how HP’s AI PC push compares with peers by running through the hand-picked 55 AI infrastructure stocks that are leaning into on-device and enterprise AI right now.
HP’s sharp run earlier this year, followed by a cooler stretch, raises a simple question. Are you now seeing the business reset under fresh AI expectations, or a mood swing in the share price that valuation can clarify next?
Most Popular Narrative: 58% Overvalued
Against HP’s last close at $30.01, the most followed narrative pegs fair value at $19.00 using a 9.45% discount rate, which frames the current AI excitement against concerns about longer term earnings power.
Although HP is investing in industrial print, 3D print and AI enabled office printers, the company still characterises the broader Print hardware market as facing a mid single digit decline in the second half of the calendar year and supplies as declining over time. If newer profit upfront tanks, subscriptions and industrial contracts such as the RRD deal cannot offset that erosion, Print revenue and segment margins could trend toward the low end of the 16% to 19% range and could drag on group profitability.
See why 4 investors see HP as 58% overvalued.
Result: Fair Value of $19.00 (OVERVALUED)
Still, if HP’s AI PCs keep gaining share in higher value categories and newer print subscriptions help maintain margins, that bearish fair value could be challenged.
Find out about the key risks to this HP narrative.
Another View: What HP’s P/E Is Saying
The bearish narrative leans on a discounted cash flow style fair value of $19.00 and calls HP overvalued. Yet on simple earnings maths, HP trades on an 11x P/E versus 18.9x for the global tech group and 19.6x for peers, while the fair ratio sits much higher at 25.4x.
That means the current earnings multiple sits well below both sector and peer averages, and below the level the fair ratio suggests the market could move toward over time. This points to valuation risk or opportunity, depending on how you see HP’s future cash generation and AI execution. Which story do you lean toward when those signals conflict?
