HP Inc.: Cheap Valuation Driven By Harsher Printing Declines And Weaker PC Margins (Upgrade)

Jun. 16, 2025 10:15 AM ETHP Inc. (HPQ) StockHPQ1 Comment
Gary Alexander
31.23K Followers
(9min)

Summary

  • HP faces macroeconomic headwinds, with weak print division sales and only modest PC growth despite AI and Windows upgrade tailwinds.
  • Valuation is attractive, with a near 5% yield and ~11x FCF multiple, providing downside protection but limited near-term upside catalysts.
  • PC segment growth is offset by declining margins due to tariffs and inability to fully pass on costs, while the print division continues a painful secular decline.
  • I'm upgrading HP to neutral: cheap valuation limits downside, but long-term risks in print and margin pressure warrant caution.
Laptop HP 15-bs157ur 3XY58EA on white background.

Roman Arbuzov

It’s a tough year for the global macroeconomy, even though the stock market recovery has, in my opinion, largely ignored those risks. And one of the most challenged areas within the S&P 500 is tech hardware, as consumers nervous about the economy pull back on

This article was written by

31.23K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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