HP (HPQ) Could Be 31% Overvalued As Momentum Tests Its Valuation
HP stock snapshot and recent performance
HP (HPQ) has drawn fresh attention after recent trading, with the stock closing at $30.05 on 4 September 2025. Investors are weighing this level against the company’s recent and longer term return profile.
Over the past day, HP has recorded a 6.64% move, with a 10.19% change over the past week. The stock shows a one-month return of 24.07% and a three-month return of 38.67%, while the one-year total return stands at 20.997%.
See our latest analysis for HP.
HP’s share price has shown firm momentum, with a 30 day share price return of 24.07% and a year to date share price return of 35.85%, while the one year total shareholder return is 21.00%.
If you are comparing HP’s move with other opportunities in technology, it can be useful to widen the lens and scan 56 AI infrastructure stocks
HP’s rapid share price move now sits against an analyst target that is below the current level and an intrinsic estimate that suggests upside. Is the market being too cautious, or already too optimistic, on the stock’s value?
Most Popular Narrative: 31.2% Overvalued
The most followed narrative currently values HP at a fair value of $22.91 per share, compared with the recent close at $30.05. That gap is built on detailed assumptions about AI PCs, margins, and future earnings power.
Expansion and momentum in recurring digital and managed service models (such as Device-as-a-Service and consumer print subscriptions) are increasing the share of predictable, higher-margin revenue streams, supporting future earnings and operational stability.
Persistent structural cost reduction initiatives, including manufacturing diversification outside China, AI-enabled automation, and a $2B annualized savings target, are set to drive sustainable improvements in net margins and bottom-line earnings resilience.
Curious what sits behind that lower fair value for HP even with recurring services and cost savings in the mix. The narrative leans heavily on modest revenue growth, slightly higher margins, and a future earnings multiple that stays well below many tech peers. The full set of assumptions may surprise you.
Using a discount rate of 9.76%, the narrative ties together flat revenue expectations, a small uplift in profit margins and steady buybacks to reach its fair value of $22.91. It also assumes HP eventually trades on an earnings multiple that is higher than today but still well under the wider US Tech sector, which helps explain why the model points to limited value at current prices.
Result: Fair Value of $22.91 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, HP still faces pressure from structural declines in print demand and intense PC pricing competition, which could challenge the current overvaluation narrative if these pressures ease.
Find out about the key risks to this HP narrative.
Another view on HP’s valuation
The analyst-driven narrative sees HP as 31.2% overvalued at $30.05 compared with a $22.91 fair value. However, the company trades on a P/E of 10.8x versus 22.8x for the global tech industry and 56.6x for peers, while the fair ratio is 24.5x. That gap points to a very different risk reward picture. Which story do you think fits HP better?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With HP showing mixed signals on valuation and fundamentals, it helps to move quickly and test the narrative against your own expectations. To see both sides of the argument in one place, take a closer look at the 3 key rewards and 3 important warning signs
Looking for more HP investment ideas?
If HP has caught your attention, do not stop here. Use this moment to scan other focused opportunities before they move out of reach.
- Target potential mispricings and broaden your watchlist by reviewing companies highlighted in the 52 high quality undervalued stocks.
- Strengthen your income focus by checking out stocks that appear in the 8 dividend fortresses.
- Sleep easier at night by comparing opportunities surfaced in the 83 resilient stocks with low risk scores.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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