Current Price
$35.48
Intrinsic Value
$43.38
+18.2% margin of safety
What Is HP Inc.'s Intrinsic Value?
As of 2026-09-11, the base-case DCF model estimates the intrinsic value of HP Inc. (HPQ) at $43.38 per share, compared with a market price of $35.48, a margin of safety of +18.2%. The base case assumes 3.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $31.63 to $57.17. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is HP Inc. (HPQ) Undervalued?
At $35.48, HPQ trades about 18.2% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Recognition and Loyalty
HP's established brand commands significant consumer and enterprise trust. This recognition fosters repeat purchases and reduces the perceived risk for buyers choosing HP products.
↑Scale and Supply Chain Efficiency
HP's massive scale allows for favorable component pricing and efficient manufacturing. This cost advantage is difficult for smaller competitors to replicate.
↑Enterprise Relationships and Services
Strong, long-standing relationships with large enterprises and government entities create sticky contracts. HP's integrated services and support further lock in these customers.
INVESTMENT RISKS
↓Dependence on PC Market Cycles
HP's revenue is heavily tied to the cyclical nature of PC upgrades and enterprise refresh cycles. Downturns in these markets can significantly impact sales and profitability.
↓Competition from Integrated Tech Giants
Large technology companies offering integrated hardware, software, and cloud solutions pose a significant competitive threat. They can bundle offerings that make standalone hardware less attractive.
↓Execution Risk in Diversification Efforts
While HP aims to diversify, successful execution of new product categories and services is crucial. Failure to innovate or gain market share in new areas could leave it vulnerable.
Base case
HPQ base case valuation
Intrinsic Value
$43.38
Margin of safety
+18.2%
Expected annual return
+4.1%
Base case assumptions: 3.2% annual growth, 10.0% discount rate, 8.36x exit multiple, 5 year projection. Data as of 2026-09-11.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the HPQ valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for HP Inc. respond.
Open DCF Calculator for HPQCompany Overview
HP Inc. is a global technology company specializing in personal computing devices, imaging and printing solutions, and a variety of related technologies, software, and support services, serving clients both in the United States and worldwide. Its operations are structured into three main divisions: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers a broad array of computing hardware, including desktop and laptop personal computers for both business and individual consumers, along with specialized workstations, thin clients, commercial mobile devices, retail point-of-sale systems, displays, and various peripherals. This division also encompasses essential software, support, and associated services. The Printing division focuses on delivering printer hardware for both general consumers and commercial clients, alongside a full suite of supplies, comprehensive print solutions, and related services. Finally, the Corporate Investments segment is dedicated to fostering innovation through HP Labs, incubating new business ventures, and managing various investment projects. HP's extensive client base spans individual end-users, small and medium-sized enterprises (SMEs), and major corporations, reaching diverse sectors such as government, healthcare, and education. Established in 1939, the company initially operated as Hewlett-Packard Company before rebranding to HP Inc. in October 2015. Its corporate headquarters are located in Palo Alto, California.
Financial Metrics — HPQ Stock Valuation Data
Revenue/Share (TTM)
$64.38
FCF/Share (TTM)
$4.22
ROIC (TTM)
21.8%
ROE (TTM)
-727.3%
P/FCF
8.4x
EV/EBITDA
10.3x
FCF Yield
11.96%
Debt/Equity
n/m
On a trailing twelve-month basis, HPQ generates free cash flow per share of $4.22 alongside a ROIC of 21.8%, both central inputs for a DCF valuation. Its P/FCF ratio of 8.4x and FCF yield of 11.96% then frame how HPQ is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of HPQ?
HP Inc. currently generates $4.22 in free cash flow per share. At the current price of $35.48, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is HPQ undervalued?
HPQ trades at a P/FCF ratio of 8.4x with a free cash flow yield of 11.96%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether HPQ is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value HPQ stock using DCF?
To perform a DCF valuation on HP Inc.: (1) Start with the trailing free cash flow per share ($4.22) as the base, (2) project future FCF growth over 5-10 years based on Computer Hardware industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting HPQ's risk profile — with a debt-to-equity of -112.38x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to HPQ?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For HP Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Computer Hardware trends, then discounting those amounts to today's dollars. HPQ's ROIC of 21.8% reflects how efficiently the company converts invested capital into profit.
How does WACC affect HPQ stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For HPQ, with a debt-to-equity ratio of -112.38x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 10.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See HPQ PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Technology valuationsDCF and P/E value HPQ with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.