HP (HPQ) is back in focus after Goodwall expanded their partnership to bring HP devices and AI training to more young people across Brazil and Latin America, highlighting the company’s efforts in education and emerging markets.

HP's recent education partnership arrives as the stock trades at US$24.63, with a 7-day share price return of 7.27% but a 30-day share price return that is down 2.42%. Over a longer horizon, the 90-day share price return of 28.08% contrasts with a 3-year total shareholder return that is down 15.04%, which suggests recent momentum has picked up after a weaker multi year experience for shareholders.

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After HP’s sharp 90 day rebound and a share price that already sits above the average analyst target, the stock still screens at a sizeable intrinsic discount. Is the market being too cautious, or is that gap earned?

Most Popular Narrative: 7.5% Overvalued

HP's most followed valuation narrative puts fair value at $22.91, below the last close of $24.63, which frames the recent rebound in a more cautious light.

Expansion and momentum in recurring digital and managed service models (such as Device-as-a-Service and consumer print subscriptions) are increasing the share of predictable, higher-margin revenue streams, supporting future earnings and operational stability.

Persistent structural cost reduction initiatives, including manufacturing diversification outside China, AI-enabled automation, and a $2B annualized savings target, are set to drive sustainable improvements in net margins and bottom-line earnings resilience.

Read the complete narrative. Read the complete narrative.

Want to see how flat revenue expectations, modest margin uplift and a lower earnings multiple than much of US tech still support that fair value estimate? The key is how these assumptions interact over time rather than any single headline number.

Based on this narrative, HP screens as slightly overvalued against the $22.91 fair value anchor, using a 9.76% discount rate and expectations for steady but unspectacular earnings growth and share count reduction. Analysts in this view are relying on modest margin improvement and a relatively low implied future P/E multiple to justify the valuation path.

Result: Fair Value of $22.91 (OVERVALUED)

However, HP's story could change quickly if structural pressure on print demand deepens or if rising memory and input costs squeeze margins more than expected.

Another View: What HP's Earnings Multiple Is Saying

While the most popular HP narrative points to a fair value of $22.91 and a stock that looks 7.5% overvalued, the earnings multiple tells a different story. HP trades on a P/E of 8.8x versus about 50x for peers and a fair ratio of 25.8x, which signals a large valuation gap that could either reflect genuine concerns or an overreaction. Which side of that spread do you think is closer to reality?

To see how this earnings multiple view fits into a fuller picture of pricing power and risk, take a look at the See what the numbers say about this price — find out in our valuation breakdown..

Next Steps

If this mix of caution and opportunity around HP resonates with you, act quickly and review the full balance of potential pros and cons by checking the 2 key rewards and 4 important warning signs.

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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.