• If you are wondering whether HP is quietly offering value or just looks cheap at first glance, it helps to step back and see how the recent share performance lines up with its fundamentals.
• HP's stock recently closed at US$22.92, with returns that include a gain of 3.6% year to date but declines of 2.5% over the past week, 6.2% over the past month, and 2.5% over the last year that may influence how investors view its risk and upside.
• Recent news around HP has focused on its position in personal systems and printing, along with how the company is responding to shifts in PC demand and broader tech sector sentiment. These updates help frame why the share price has moved the way it has and why investors are looking more closely at what they are paying for its earnings and cash flows.
• On Simply Wall St's valuation checks, HP currently scores 5 out of 6, which suggests that several common valuation measures point to the stock trading below their assessed fair value. This sets up a closer look at different valuation approaches and a more comprehensive way to think about value at the end of this article.

Approach 1: HP Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what HP stock could be worth by projecting the company’s future cash flows and discounting them back into today’s dollars. It focuses on what HP may generate for shareholders over time rather than only what the market is currently willing to pay.

HP’s latest twelve month Free Cash Flow is about $3.84b. The current 2 Stage Free Cash Flow to Equity model uses analyst estimates for the next few years and then extends those projections further out. By 2030, the model is using a projected Free Cash Flow of $3.10b, with the years in between stepping through a ten year path that starts at $2.80b in 2026 and gradually adjusts toward that 2030 level. All cash flows in this model are assessed in $.

When all of those projected cash flows are discounted back, Simply Wall St’s DCF model arrives at an estimated intrinsic value of $40.72 per share for HP. Against the recent share price of $22.92, this implies HP is trading at a 43.7% discount, which points to the stock looking undervalued on this measure.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests HP is undervalued by 43.7%. Track this in your watchlist or portfolio, or discover 43 more high quality undervalued stocks.

Approach 2: HP Price vs Earnings (P/E)

For a profitable company like HP, the P/E ratio is a useful way to see what investors are paying for each dollar of earnings. A higher or lower P/E often reflects what the market expects for future earnings growth and how much risk investors believe they are taking on.

In simple terms, stronger expected growth and lower perceived risk usually support a higher “normal” P/E, while slower growth or higher risk tend to justify a lower one. HP currently trades on a P/E of 8.21x. That is below the Tech industry average P/E of 23.57x, and also below the broader peer group average of 47.11x. This suggests the market is placing a lower multiple on HP’s earnings than many of its peers.

Simply Wall St’s Fair Ratio for HP is 26.88x. This is a proprietary estimate of what HP’s P/E might be, given factors such as its earnings growth profile, industry, profit margins, market capitalization and risk characteristics. Because Fair Ratio ties the multiple directly to HP’s own fundamentals rather than just sector or peer comparisons, it can provide a more tailored benchmark. With HP’s current P/E of 8.21x sitting well below the Fair Ratio of 26.88x, the stock screens as undervalued on this measure.

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 understand valuation. Narratives give you that by letting you attach a clear story about HP to the numbers you see. You set your own view of fair value based on your assumptions for future revenue, earnings and margins, then compare that Fair Value with the current price to judge whether the stock looks attractive for your goals.

On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors to connect a company’s story to a financial forecast. Each Narrative turns views about factors like AI PCs, cost savings or margin pressure into explicit estimates that roll up into a Fair Value that updates automatically when new news, earnings or guidance is added.

For HP, one investor might align with the more optimistic Narrative that assumes a Fair Value of US$29.60 based on expectations around AI PCs, cost discipline and a future P/E of about 10.4x. Another investor might prefer the more cautious Narrative that uses a Fair Value of US$16.00 with slower revenue assumptions and a future P/E of about 7.4x. Seeing both side by side helps you decide which story, and which valuation, fits your own expectations.

For HP however we will make it really easy for you with previews of two leading HP Narratives:

Fair Value: US$29.60

Implied discount to this Fair Value based on the recent US$22.92 share price: about 22.6%

Revenue growth assumption: 115%

• Frames HP around AI PCs, advanced compute solutions and AI powered workplace tools, with Humane and CosmOS integration used as a key part of the story for revenue and margin potential.
• Leans on cost savings of US$1.9b by fiscal 2025 and manufacturing diversification away from China to support higher net margins and earnings resilience.
• Ties the US$29.60 Fair Value to bullish analyst assumptions for 2029 revenue, earnings and a future P/E of about 10.4x, while highlighting execution risks, pricing pressure, tariffs and softer consumer demand as factors that could challenge this view.

Fair Value: US$22.91

Implied premium to this Fair Value based on the recent US$22.92 share price: about 0.04%

Revenue growth assumption: 51%

• Centers on AI PCs, premium devices and digital services helping HP hold revenue and margins, but pairs that with concerns about structural pressure in traditional print and PC hardware.
• Emphasizes competition, aggressive pricing and long term shifts toward mobile, cloud and digital document tools that may weigh on HP's core print and PC profit pools.
• Uses a US$22.91 Fair Value and a future P/E of about 9.5x to reflect analyst expectations for relatively flat revenue, modest margin improvement and ongoing risks from tariffs, supply chain moves and post refresh PC demand.

If you want to see how these narratives expand into full financial forecasts and risk maps, you can step through them in detail, compare them with your own assumptions, and then track HP as new earnings, guidance and news are incorporated into each Narrative over time using the community tools on Simply Wall St.

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.