Investment Thesis
HP Inc faces structural headwinds with deteriorating profitability metrics and negative stockholders' equity, indicating potential insolvency concerns. While the company generates positive operating cash flow and maintains serviceable debt coverage, the combination of weak margins (3.8% net), poor liquidity (0.76x current ratio), and negative equity raises significant questions about long-term viability and equity value.
HPQ Strengths
- Positive operating cash flow of $383M demonstrates underlying business can generate cash
- Adequate interest coverage ratio of 7.7x suggests near-term debt service capability
- Modest revenue growth of 3.2% YoY shows some business resilience in competitive hardware market
HPQ Risks
- Negative stockholders' equity of -$766M indicates liabilities exceed assets and equity value is destroyed
- Critically weak liquidity with current ratio of 0.76x and quick ratio of 0.46x creates near-term refinancing risk
- Deteriorating profitability with net margin of only 3.8% and EPS declining 5.7% YoY despite flat net income growth
- Free cash flow margin of only 1.0% leaves minimal cushion for dividends, buybacks, or debt reduction
- High long-term debt of $8.8B relative to thin profitability creates leverage risk if operational performance declines
Key Metrics to Watch
- Stockholders' equity trend and path to positive equity restoration
- Operating margin trajectory and gross margin sustainability
- Free cash flow generation and debt paydown progress
- Current ratio improvement and working capital management
HPQ Financial Metrics
HPQ Profitability Ratios
HPQ Balance Sheet & Liquidity
HPQ 5-Year Financial Trend
5-Year Trend Summary: HP INC's revenue has declined by 13% over the 5-year period, indicating business contraction. The most recent EPS of $3.26 reflects profitable operations.
HPQ Growth Metrics (YoY)
HPQ Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $13.5B | $545.0M | $0.58 |
| Q3 2025 | $13.5B | $406.0M | $0.65 |
| Q2 2025 | $12.8B | $406.0M | $0.42 |
| Q1 2025 | $13.2B | $565.0M | $0.59 |
| Q3 2024 | $13.2B | $469.0M | $0.65 |
| Q2 2024 | $12.8B | $469.0M | $0.61 |
| Q1 2024 | $13.2B | $469.0M | $0.47 |
| Q3 2023 | $12.9B | $469.0M | $0.47 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HPQ Capital Allocation
HPQ SEC Filings
Access official SEC EDGAR filings for HP INC (CIK: 0000047217)