• Wondering if HP at US$27.04 is offering good value right now, or if the recent excitement has already been priced in?
• The stock has returned 7.1% over the past week, 29.8% over the past month, 22.2% year to date, and 14.1% over the past year. The 3 year return is roughly flat and the 5 year return stands at 5.6%.
• Recent headlines around PC demand, printing markets, and broader tech sector sentiment have kept HP on many investors' watchlists. Together, these themes help frame how the market is reacting to HP as conditions shift for hardware focused technology companies.
• Right now HP scores a 5 out of 6 valuation check. The rest of this article will walk through what that means across different valuation approaches, before finishing with a more complete way to think about fair value.

Approach 1: HP Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s dollars. The goal is to estimate what the entire business might be worth at present.

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 is about $3.84b. Analyst and extrapolated estimates then project annual free cash flows through 2035, with a 2030 projection of $3.10b. These cash flows are discounted each year to reflect the time value of money, using the figures provided, such as discounted values of $2.56b for 2026 and $1.20b for 2035.

Combining all those discounted cash flows, the DCF model indicates an estimated intrinsic value of about $42.99 per share. Compared with the current share price of $27.04, this output suggests the stock is 37.1% undervalued based on this cash flow analysis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests HP is undervalued by 37.1%. Track this in your watchlist or portfolio, or discover 46 more high quality undervalued stocks.

Approach 2: HP Price vs Earnings

For a profitable company like HP, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. A higher P/E usually reflects stronger growth expectations or lower perceived risk, while a lower P/E can point to more modest growth expectations or higher perceived risk.

HP currently trades on a P/E of about 9.7x. That sits well below the broader Tech industry average P/E of about 24.8x and also below a peer group average of roughly 63.3x. On simple comparisons, the stock is being priced at a discount to both its sector and peers.

Simply Wall St’s Fair Ratio for HP is 25.4x. This is a proprietary estimate of what a reasonable P/E might be for the company, after factoring in elements such as earnings growth profile, profitability, industry, market cap and key risks. Because it anchors to HP’s own characteristics rather than broad group averages, the Fair Ratio can give a more tailored reference point than a straight peer or industry comparison. Set against the current P/E of 9.7x, the 25.4x Fair Ratio suggests the stock is trading below that tailored reference level.

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 think about valuation, so Narratives are introduced here as a simple way for you to attach a clear story about HP to the numbers such as fair value, future revenue, earnings and margins, connecting what you believe about the company to a financial forecast and then to a fair value that you can compare with the current share price.

On Simply Wall St’s Community page, Narratives are available as an easy tool used by millions of investors, helping you see how a particular view on HP translates into forecasts and a fair value that updates automatically when new information like earnings, news or guidance arrives, so your story and numbers stay aligned over time.

For HP, one investor might lean toward the more optimistic narrative with a fair value around US$25.18, based on a scenario where revenue grows 2.3% a year and earnings reach US$3.2b by 2029 on a P/E of 8.8x. Another investor might align with the more cautious narrative, with a fair value of US$16.00 that assumes revenue declines of 1.1% a year, earnings of US$2.4b and a P/E of 7.4x. Comparing each fair value with today’s price can help you decide whether HP looks closer to a buy, a hold or a potential sell for your own portfolio.

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.