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Is HP (HPQ) Quietly Undervalued? Reassessing the Tech Hardware Stock’s Recent Performance and Long‑Term Prospects

Simply Wall St · 2d ago

HP (HPQ) has been drifting rather than sprinting this year, but its recent share performance is still giving investors fresh data to work with, especially after a choppy stretch in tech hardware.

See our latest analysis for HP.

Despite the latest uptick, HP’s 90 day share price return of negative 10.44 percent and one year total shareholder return of negative 24.19 percent suggest momentum has been fading. However, the five year total shareholder return of 23.96 percent shows longer term holders are still ahead.

If HP’s mixed trajectory has you reassessing your exposure to hardware names, it could be worth seeing which high growth tech and AI stocks are showing more consistent momentum and growth potential right now.

With earnings still growing modestly and the share price languishing well below intrinsic value estimates, investors now face a critical question: is HP quietly undervalued, or is the market already pricing in its next chapter of growth?

Most Popular Narrative: 2.1% Undervalued

With HP last closing at $25.38 against a narrative fair value near $25.93, the spread is narrow but still signals a modest upside case.

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. HP's focus on responsible innovation and sustainability, exemplified by significant recycled content in devices and advances toward net zero, aligns with growing enterprise and consumer preference for eco friendly technology. This is described as strengthening competitive positioning and supporting revenue and margin growth over the long term.

Read the complete narrative.

Curious how modest revenue growth, small margin gains, and a disciplined future earnings multiple can still support this valuation gap? The narrative’s detailed assumptions might surprise you.

Result: Fair Value of $25.93 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, structural declines in printing and intense PC price competition could still erode margins and mute any upside implied by today’s fair value estimates.

Find out about the key risks to this HP narrative.

Build Your Own HP Narrative

If this perspective does not quite match your own view, or you would rather dig into the numbers yourself, you can build a personalized narrative in minutes, Do it your way

A great starting point for your HP research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.