Key Stats for HP Inc. Stock
- Earnings Reaction: +0.1%
- Current Price: $18.21
- Valuation Model Target: $31.33
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What Happened?
HP Inc. (HPQ) is actively navigating a highly volatile commodity environment, with shares trading near $18.21 following a solid but complex first-quarter earnings release.
The hardware giant delivered strong top-line growth, reporting first-quarter revenue of $14.4 billion (a 7% year-over-year increase).
This revenue beat was primarily driven by an 11% surge in Personal Systems, fueled by the ongoing Windows 11 enterprise refresh and explosive demand for new artificial intelligence capabilities.
However, the hardware sector is currently trapped in a massive commodity cost super cycle.
Management warned that DRAM and NAND memory prices roughly doubled sequentially.
This massive spike has pushed memory and storage from their historical baseline of 15% to 18% of the PC bill of materials to a staggering 35%.
Interim CEO Bruce Broussard detailed exactly how the company is aggressively defending its profitability against these severe input cost headwinds.
Broussard stated verbatim: “At the same time, we are implementing strategies on supply and cost. We are also configuring our products and shaping demand to align the supply we have with our customer needs. And we are taking targeted pricing actions to offset the remaining cost impact in close partnership with both our channel and direct customers.”
To fund investments while protecting margins, the company is also accelerating a company-wide cost savings program aimed at delivering $1 billion in gross annualized run rate savings by 2028.
See analysts’ growth forecasts and price targets for HP Inc. stock (It’s free!) >>>
Is HP Inc. Undervalued Today?
The TIKR Model indicates that the market is excessively discounting the stock based on cyclical memory cost spikes while ignoring the structural shift toward higher margin AI PCs.
The model projects a highly defensive target price of $31.33, representing an attractive 72.1% potential total return from current levels.
HP is successfully commanding a massive transition in edge computing.
During the first quarter, AI PCs accounted for over 35% of total PC shipments, up dramatically from 25% just two quarters ago.
This mix shift allows HP to capture higher average selling prices and gain market share in the premium commercial category.
CFO Karen Parkhill explained exactly how the company is balancing these short term margin pressures with long term shareholder returns.
Parkhill stated verbatim: “While the memory situation remains fluid, we are executing well on all of the levers within our control and will continue to do so in the quarters ahead.”
Read the full HP Inc Transcript on TIKR to see the 2026 guidance breakdown >>>
Valuation Deep Dive
The TIKR Advanced Valuation Model identifies HP as a highly resilient cash generator capable of surviving brutal hardware cycles while aggressively buying back its own deeply discounted stock.
- Target Price: $31.33
- Current Price: $18.21
- Annualized Return (IRR): 12.3%
Aggressive Capital Return Program: Despite maintaining free cash flow guidance closer to the low end of its $2.8 billion to $3 billion range, HP remains a cash printing machine. The company returned over $600 million to shareholders in the first quarter alone, deploying over $300 million to repurchase its heavily discounted equity. Management reiterated its strict commitment to returning approximately 100% of free cash flow to shareholders over time.
High Margin Print Resiliency: While Personal Systems absorbs the brunt of the memory cost shock, HP’s Print division is operating at peak efficiency to subsidize the broader business. The company successfully executed its strategy to shift toward profitable upfront unit placements and Big Tank configurations. By driving double-digit growth in consumer subscriptions and industrial digital print, the Print segment is operating at an elite 18.3% operating margin, providing a massive profit cushion.
Conclusion: A dominant hardware leader successfully weaponized its massive cash flow and supply chain agility to survive a brutal memory super cycle. HP Inc. offers a highly defensive 72.1% projected total return potential. The path to the $31.33 target is paved by an aggressive AI PC rollout, elite Print margins, and relentless share repurchases.
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How Much Upside Does HP Inc. Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
