NYSE:HPQ
HP INC
A diversified leader in personal computing and printing solutions delivering essential hardware for business and education sectors worldwide.
Key Metrics
Investment Thesis
Bull Case
HP offers attractive dividend yields combined with share repurchases totaling over $1B, signaling management confidence in cash generation capabilities. The company's diversified revenue mix between PCs and printers provides stability against cyclical downturns in any single segment. Strong free cash flow conversion allows for continued capital return programs even when earnings fluctuate.
Bear Case
The negative shareholders' equity of -$346M suggests potential balance sheet stress or aggressive accounting that warrants caution during economic uncertainty. Declining net income trends over the last three years indicate persistent profitability challenges in a low-margin hardware business model. Heavy reliance on legacy printing technology may limit growth upside compared to pure-play software or AI-focused competitors.
About HP INC
HP Inc. is a leading global provider of personal computers, printers, and related supplies serving business, education, and consumer markets. The company leverages its deep distribution network to deliver reliable hardware solutions across enterprise, government, and retail channels. With revenue reaching $55.30B in the latest fiscal year, HP maintains a strong presence in both PC and print sectors while managing significant operational leverage.
Analysis
Management Discussion
While revenue grew to $55.30B, net income declined sequentially from $2.77B in 2024 to $2.53B, reflecting margin compression and higher operating expenses of $8.22B. The company maintained a healthy cash flow from operations of $3.70B despite investing $1.18B in capital expenditures and seeing significant changes in working capital including an $828M increase in inventory.
Industry Overview
The global PC and printer industry is highly competitive with consolidation occurring among major manufacturers seeking scale efficiencies. Market dynamics are shifting as organizations prioritize hybrid work solutions and sustainable manufacturing practices over sheer volume sales. Success depends on innovation in connectivity, security features, and transitioning from hardware sales to recurring supply services.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $53.72B | $53.56B | $55.30B |
| Cost of Revenue | $42.21B | $41.74B | $43.90B |
| Gross Profit | $11.51B | $11.82B | $11.39B |
| Operating Expenses | $8.05B | $8.00B | $8.22B |
| Operating Income | $3.46B | $3.82B | $3.17B |
| R&D | $1.58B | $1.64B | $1.60B |
| G&A | $5.36B | $5.66B | $5.82B |
| Stock-Based Comp | $438.0M | $452.0M | $522.0M |
| D&A | $850.0M | $830.0M | $916.0M |
| Depreciation | $491.0M | $501.0M | $523.0M |
| Amortization | $350.0M | $318.0M | $345.0M |
| Other OpEx | $1.12B | $702.0M | $795.0M |
| Non-Operating Income | $-519.0M | $-539.0M | $-506.0M |
| Interest Income | $67.0M | $78.0M | $89.0M |
| Pre-Tax Income | $2.94B | $3.28B | $2.67B |
| Income Tax | $-326.0M | $504.0M | $139.0M |
| Continuing Ops | $3.26B | $2.77B | $2.53B |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $3.26B | $2.77B | $2.53B |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $3.26B | $2.77B | $2.53B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $17.98B | $20.76B | $22.45B |
| Cash & Equivalents | $3.11B | $3.24B | $3.69B |
| Accounts Receivable | $4.24B | $5.12B | $5.69B |
| Inventory | $6.86B | $7.72B | $8.51B |
| Prepaid Expenses | $1.45B | $1.46B | $1.58B |
| Other Current Assets | $2.33B | $3.22B | $2.98B |
| Long-Term Assets | $19.03B | $19.15B | $19.32B |
| PP&E (Net) | $2.83B | $2.91B | $3.05B |
| Goodwill | $8.59B | $8.63B | $8.71B |
| Operating Leases | $1.19B | $1.17B | $1.13B |
| Other LT Assets | $6.42B | $6.44B | $6.43B |
| Total Assets | $37.00B | $39.91B | $41.77B |
| Current Liabilities | $24.49B | $28.69B | $29.26B |
| Accounts Payable | $14.05B | $16.90B | $18.05B |
| Current Debt | $179.0M | $1.36B | $788.0M |
| Current Leases | $430.0M | $443.0M | $401.0M |
| Deferred Revenue | $1.42B | $1.45B | $1.61B |
| Other Current Liab | $8.41B | $8.54B | $8.41B |
| Long-Term Liabilities | $13.59B | $12.54B | $12.86B |
| Long-Term Debt | $9.25B | $8.26B | $8.82B |
| LT Operating Leases | $825.0M | $787.0M | $815.0M |
| Other LT Liab | $2.18B | $2.01B | $1.59B |
| Total Liabilities | $38.07B | $41.23B | $42.12B |
| Shareholders' Equity | $-1.07B | $-1.32B | $-346.0M |
| Retained Earnings | $-2.36B | $-2.68B | $-2.03B |
| AOCI | $-223.0M | $-434.0M | $-457.0M |
| Total L&E | $37.00B | $39.91B | $41.77B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $3.26B | $2.77B | $2.53B |
| Non-Cash Adjustments | $2.55B | $-4.41B | $-336.0M |
| Working Capital Changes | $-2.24B | $5.39B | $1.50B |
| Cash from Operations | $3.57B | $3.75B | $3.70B |
| Cash from Investing | $-590.0M | $-646.0M | $-1.18B |
| Share Buybacks | $100.0M | $2.10B | $850.0M |
| Dividends Paid | $1.04B | $1.07B | $1.09B |
| Cash from Financing | $-2.89B | $-3.08B | $-2.06B |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $87.0M | $21.0M | $460.0M |
| Beginning Cash | $3.15B | $3.23B | $3.25B |
| Ending Cash | $3.23B | $3.25B | $3.71B |
Frequently Asked Questions
How does HP INC make money?
Personal Systems including laptops and desktops; Printing Solutions covering printers and consumables; Supply Chain & Services providing logistics, maintenance, and IT support services.
What are the main risks for HPQ?
Intense competition from OEMs like Dell and Lenovo driving downward price pressure on hardware margins; Rapid technological shifts in AI and cloud computing potentially disrupting traditional printer revenue streams; Exposure to global macroeconomic headwinds affecting enterprise IT spending budgets.
What is HPQ's competitive advantage?
Global scale with extensive distribution networks ensuring rapid market penetration; High brand loyalty in the enterprise PC sector driven by reliability and security features; Cost-efficient supply chain management optimizing gross margins despite competitive pricing pressures.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.