Overview HP Inc. is a global provider of personal computers, printers and related services whose recent financial profile combines strong operating profitability and cash-generation with signs of slowing returns and constrained near-term liquidity. Strengths Operating Efficiency The company’s operating efficiency is a clear strength: latest operating margin is 26.7% and gross margin is 19.5% , ref
HP Inc. is a global provider of personal computers, printers and related services whose recent financial profile combines strong operating profitability and cash-generation with signs of slowing returns and constrained near-term liquidity.
The company’s operating efficiency is a clear strength: latest operating margin is 26.7% and gross margin is 19.5%, reflecting healthy unit economics even as volume dynamics vary (Profit Margin Trends).
Operating cash flow remains higher than reported earnings, with trailing twelve‑month OCF of $3.75B versus TTM net income of $2.55B, and an average cash conversion ratio of 1.35, supporting earnings quality and cash coverage of operations (Earnings Quality Analysis); Strategic Capital Allocation).
The balance sheet shows conservative leverage — net debt effectively zero and debt-to-equity around 0.019 with interest coverage near 9.93x — and the market multiple sits near the low end of its recent range with a P/E of about 7.7x (Price-to-Earnings (PE) Ratio Trend).
Liquidity metrics are tight: the current ratio is 0.7447, indicating short-term obligations exceed current assets. Return on equity has been trending down to a recent 5.9% and reported ROE growth is negative (≈ −8.3%), reflecting reduced efficiency of equity deployment versus earlier years when ROE was in the mid‑teens (Return on Equity (ROE)).
Operating cash flow has also contracted materially from $6.41B in 2021 to \$3.75B TTM, and TTM net income has fallen from a peak around $6.50B to $2.55B, underscoring the scale of the normalization in profitability and cash generation (Revenue & Net Income).
Key fundamentals to watch going forward are the trajectory of operating cash flow (currently \$3.75B TTM) and quarterly net income (most recent quarter $450M on revenue of $13.52B) as captured in Revenue & Net Income and Strategic Capital Allocation; margin trends — gross 19.5%, operating 26.7%, net 5.1% — in Profit Margin Trends; and ROE movement from the current 5.9% in Return on Equity (ROE). Also monitor diluted EPS level ($2.71) and the recent 1.4% year-over-year EPS growth alongside the P/E around 7.7x via EPS Diluted & Revenue per Share and Price-to-Earnings (PE) Ratio.
The foundation of business quality and long-term value creation
HP INC's revenue in the most recent quarters shown moved from $13.19B (2024-01-31) to $12.80B (2024-04-30) and rebounded to $13.52B (2024-07-31), indicating a modest recovery through mid-2024. The broader revenue series in the dataset includes several large and nonstandard values in earlier periods (for example, $64.94B on 2022-10-31 and $49.92B on 2021-10-31) as well as occasional negative reported figures in 2020–2021, which are visible as outliers relative to the recent quarterly pattern.
Net income for HP INC has remained positive each recent quarter but has shown quarter-to-quarter volatility. After peaks around $906.0M (2024-10-31) and $795.0M (2025-10-31), net income declined to $545.0M in the 2026-01-31 quarter and further to $450.0M in the 2026-04-30 quarter, reflecting a downward move in the most recent two quarters. The most recent quarterly revenue was $13.52B. The most recent quarterly net income was $450.0M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Nov 2021 to Oct 2022
Analyzing long-term margin stability and competitive positioning
HP INC's margins in the most recent period show mixed movement versus prior quarters. Gross margin in the latest quarter (2022-10-31) is 19.5%, which returns to a level similar to the 18–21% range seen in earlier years after a sharp trough of -12.2% on 2022-01-31. Operating margin has exhibited large volatility, peaking at 121.1% on 2021-10-31 and 163.6% on 2022-01-31 before moderating to 26.7% in the most recent quarter. Net profit margin has declined from 10.2% on 2021-10-31 to 5.1% on 2022-10-31.
The early-2022 quarter (2022-01-31) saw gross margin turn negative and operating margin surge, followed by a normalization by 2022-10-31 with gross and operating margins moving back toward more typical historical levels while net margin declined. The latest observed values are:
Understanding Profit Margins
Between Nov 2021 and Oct 2022, Hp Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Over the most recent quarters, HP INC's trailing twelve‑month net income has been in the mid-$2 billion range, declining slightly from $2.72B (2025-01-31) to $2.55B (2026-04-30) with intermediate TTM readings of $2.64B, $2.53B and $2.51B. These recent TTM net income figures are below earlier peaks shown in the dataset (for example $6.50B in 2021 and $3.40B in early 2024).
Trailing twelve‑month operating cash flow in the dataset sits at $3.75B as of 2024-10-31, down from higher historical levels such as $6.41B in 2021 and double‑digit billions in 2013–2014. In the most recent overlapping periods, operating cash flow exceeds reported net income (for example $3.75B OCF vs $2.77B net income at 2024-10-31), indicating a positive cash/earnings gap in the available data. The most recent Net Income (TTM) was $2.55B and the most recent Operating Cash Flow (TTM) in the dataset was $3.75B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
HP INC's return on equity has trended downward over the past several reported quarters. From 10.2% at 2023-04-30 it declined to 8.8% (2023-10-31), then to 7.0% (2024-10-31), 6.5% (2025-04-30), 6.1% (2025-10-31) and most recently 5.9% (2026-04-30), indicating a steady decrease in ROE across these periods.
Looking further back, ROE was substantially higher in earlier years—ranging from the mid-teens to high-teens (for example, 17.2% on 2018-04-30 and 18.8% on 2014-10-31) before the multi-year decline to the current low single-digit level. The most recent Return on Equity (ROE) was 5.9% as of period end 2026-04-30.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
HP INC's operating cash flow (TTM) has trended downward from earlier peaks: it was $6.41B at the 2021-10-31 TTM, fell to $4.46B at 2022-10-31 TTM and most recently reported $3.75B at the 2024-10-31 TTM, indicating a stepwise contraction in operating cash generation over those periods.
Investing cash flow (TTM) moved from a large outflow of -$3.55B at 2022-10-31 TTM to much smaller negative levels thereafter, with -$590M at 2023-10-31 and -$646M at 2024-10-31 TTM before the most recent -$718.0M at 2025-01-31 TTM, reflecting smaller but persistent investing outflows in the latest trailing twelve-months.
Financing cash flow (TTM) shows substantial net outflows in earlier years (for example -$5.96B at 2021-10-31 and -$5.64B at 2018-10-31) that have moderated into the low single-digit billions of net outflow in recent periods: -$3.08B at 2024-10-31 TTM, -$2.06B at 2025-10-31 TTM and most recently -$2.30B at 2026-01-31 TTM.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
HP INC's trailing twelve‑month price-to-earnings ratio has moved from a recent peak of 12.0x on 2024-10-31 into a lower range through 2025, falling to 8.8x by 2025-07-31, then briefly rebounding to 10.3x on 2025-10-31 before declining again. The most pronounced inflection in the recent series was the October 2024 peak followed by the mid‑2025 decline and the October 2025 uptick.
In the last two reported quarters the P/E dropped to 7.4x on 2026-01-31 and then increased slightly to 7.7x on 2026-04-30, leaving the ratio near the lower end of the ~7–12x band seen since late 2023. The most recent Price-to-Earnings ratio was 7.7x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.