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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Hp Inc. (XNYS:HPQ) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HPQ
Name:
HP INC. (XNYS:HPQ)
Sector:
1.38B
Industry:
Computer Hardware
CEO:
Mr. Enrique Lores
Total Employees:
51,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -519.31% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HP INC.(HPQ) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMPUTER HARDWARE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
27.64
One Month Price Target:
$27.79
Six Month Price Target :
$28.54
Likely Price in One Year's Time:
Ticker:
$29.45
Likely Trading Range Today Under (Normal Volatility)
$27.53
Price Upper limit ($) :
$27.79
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$26.08
This week:
$24.16
This month :
$20.68
Other Primary facts
Market Cap:
27.50B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.01B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.64%
-15.83%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$34.85
$31.52
$20.43
$23.76
Medium risk (<10%) entry points
Buy Call
Sell Call
$30.44
Buy Put:
Sell Put:
$29.73
$24.83
$25.55
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HPQ
Sharpe Ratio:
2.75%
Comparison:
HPQ, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -15.29% lower than the industry
& ratio is 20.83% higher than the market/S&P 500 average
Average Returns/Yield of
HPQ
Daily returns:
0.09%
Weekly returns:
0.43%
Monthly returns:
1.71%
Yearly returns:
26.14%
Comparison of returns:
Average annual returns/yield (last 3 years) is -21.53% below industry average
Classification:
HPQ, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.75
Statistical test of Returns:
HPQ has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.78%
Weekly Volatility:
6.22%
Monthly Volatility:
12.44%
Yearly Volatility:
43.10%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.00%
Volatility in last five trading days has been 7.77% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.63%
Weekly VaR:
-12.58%
Monthly VaR:
-25.17%
How Much Can the price of
HPQ
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-87.18%
This translates to price declining to:
$21.76
This translates to price declining to:
$3.54
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
HPQ is a 77.63% riskier investment compared to the market/S&P 500 & is 52.18% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -12.50% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HPQ
Beta in relation to market/S&P 500--0.97
Expected beta in 1 year's time:
1.045
Expected beta in 3 year's time:
1.477
Unlevered (debt free) Beta:
-0.741
Beta in relation to Nasdaq (XNAS):
0.918
Beta in relation to all global stocks::
0.795
Beta Comparison & Analysis
Beta of competitors/peers::
1.302
Beta is -25.37% lower than peers
Average Industry Beta:
1.224
Beta is -20.62% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.107
Alpha is -26.69% below industry average alpha yield
Alpha is 681% higher than market/& is unsustainably high
Analysis of Cost of Capital of
HPQ
Equity cost of capital:
0.098
Equity cost of capital is -14.99% below industry mean WACC
Unlevered (without debt) cost of capital:
-7.47%
Before-tax cost of debt:
1.83%
After-tax cost of debt:
1.44%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.44%
WACC is -12.92% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$65.10
Revenue growth rate per share of (3Y):
-11.94
Annual revenue growth rate is -8.23% below industry average
EPS:
$5.58
Expected Annual growth rate of EPS (3Y):
39.28%
Expected future EPS growth rate is 86.22% higher than the Computer Hardware industry
Free cash flow (FCF) per share:
$5.22
Balance sheet equity growth per share: 42.20%
Equity growth rate per share is -2593.54% lower than the industry
Debt per share
$6.33
EBITDA per share
$8.31
Valuation Analysis Today of
HPQ
P/E Ratio:
4.82
P/E Ratio of Competitors/Peers:
18.17
P/E ratio is -73.48% lower than main peers & is -64.06% lower than the industry
Stock price/value with industry average P/E ratio: $74.81
HPQ is -63.05% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $54.61
Present value of the expected future dividends only: $16.60
P/S (Price to Sales ratio):
0.42
Price to sales ratio is -84.95% below the industry mean
P/B (Price to book value ratio):
-11.94
Price to free cash flow: 5.30
Price to free cash flow ratio is -91.74% lower than the industry
Net income growth rate (3Y):
66.37%
Net income growth rate is -28.02% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.31%
Dividend yeild: 3.42%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $0.94
Expected next dividend best case: $0.28
Expected next dividend worst case: $0.22
Average dividend payment (long-term): $0.20
Average dividend increase/decrease (growth rate) % per period: 3.90%
Expected next dividend payment date: 10/04/2022
Expected next dividend record date: 09/06/2022
-
Previous dividend payment date: 07/06/2022
Previous dividend record date: 06/08/2022
-
Dividend History:
2022-06-07--$0.25
2021-12-07--$0.25
2021-06-08--$0.19
2022-03-08--$0.25
2021-09-07--$0.19
2021-03-09--$0.19
Dividend growth rate is -120.62% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-273.54%
Net debt to equity ratio:
-157.35%
Debt to assets ratio:
16.37%
Net debt to assets ratio:
9.41%
Debt-to-asset ratio is -73.34% below industry average
Ability to repay debt:
Interest coverage ratio:
64.81
Interest coverage ratio is 1213.84% more than industry average
Looking forward:
Debt growth rate:
35.21%
Annual debt growth is 32% higher than industry average debt growth rate
Debt repayment rate in last quarter: 6.60%
Analysis of Key Statistics
Correlation of price movement with the market:
0.663
Statistical significance of correlation:
HPQ has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.599
Stock price is 10.58% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.599
Correlation of price movement with Nasdaq (^IXIC):
0.047
Covariance of price movement with the market:
0.075
Kurtosis
7.255
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.17
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HPQ
Gross Profit Margin Ratio:
82%
Operating Profit Margin Ratio:
8.03%
Operating profit margin is 6.23% higher than the industry
Net Profit Margin Ratio:
82%
Effective Tax Rate:
15.47%
Effective tax rate is -4.10% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-270.32%
Return on equity (ROE) is -2121.05% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.17%
Return on assets (ROA) is 116.75% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
0.74
Current ratio is -67.85% below industry average
Cash Conversion Cycle (days):
-71.2
Cash conversion cycle is -189.42% below industry average
The remaining useful life of property plant & equipment is: 8.3 years
Stock based compensation to net income ratio:
2.11%
In-depth Efficiency Analysis
Revenue generated per employee:
1.3M
Each employee generates 78% more revenue than industry average revenue per employee
EBITDA generated per employee:
163.9K
Each employee generates 61% more EBITDA than industry average revenue per employee
Profit generated per employee:
123.4K
Each employee generates 76% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
27.1K
Each employee generates 121% more free cash flow than industry average revenue per employee
Assets/Capital per employee
323.1K
Each employee generates 121% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 29.03%
Growth rate in R&D investment/expenditure is -1815.12% lower than the industry
Competitors/Peer firms of
HPQ
MOTOROLA SOLUTIONS, INC. (XNYS:MSI)
ARISTA NETWORKS, INC. (XNYS:ANET)
DELL TECHNOLOGIES INC. (XNYS:DELL)
Unity Software Inc (XNYS:U)
AMPHENOL CORPORATION (XNYS:APH)
Nokia Corporation (XNYS:NOK)
KEYSIGHT TECHNOLOGIES, INC. (XNYS:KEYS)
PALANTIR TECHNOLOGIES INC. (XNYS:PLTR)
-
Current Analyst Ratings
Strong buy�21%
Buy�29%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
65.48B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
52.11B
13.37B
1.77B
-
5.78B
-
311.00M
7.85B
-
129.00M
786.00M
8.36B
5.26B
6.29B
7.45B
1.15B
6.29B
Statement of Cash Flow
Date:
Period:
197.00M
Differed Income Tax :
5.00M
Stock Based Compensation :
133.00M
Change in Working Capital :
2.00M
Accounts Receivables:
337.00M
Other Working Capital:
- 1093000.00K
Other Non-Cash Items:
234.00M
Net Cash Provided by Operating Activities:
1.66B
Investments in PP&E:
- 273000.00K
Net Acquisitions:
- 21000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/31/22
2022
Q1
3.39B
-
3.39B
5.18B
9.02B
4.84B
22.43B
2.62B
6.82B
-
-
-
7.04B
16.48B
-
38.91B
18.07B
689.00M
-
-
11.44B
30.20B
6.37B
4.67B
11.04B
-
41.24B
-
-
- 16000.0K
-
January 31, 2022 at 7:00:00 AM
59.96B
- 2328000.00K
38.91B
-
7.06B
3.7B
-
14.00M
- 280000.00K
- 450000.00K
-
- 1508000.00K
- 271000.00K
- 53000.00K
- 2282000.00K
-
- 905000.00K
3.39B
4.30B
1.66B
- 273000.00K
1.38B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
HPQ
2023
2024
2025
2026
2027
$29.60
$67.19
$71.58
$76.26
$81.24