DCF Studio

    HPQ · NYQ · Technology

    HP Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 59.04

    Market price

    USD 28.43

    Implied upside

    +107.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-10-31

    Value Per Share

    Perpetuity growth
    USD 59.04+107.7%
    Exit multiple
    USD 44.44+56.3%
    Market price
    USD 28.43

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 59.9bnUSD 60.1bnUSD 60.6bnUSD 61.2bnUSD 61.9bnUSD 62.8bnUSD 63.9bnUSD 65.2bnUSD 66.7bnUSD 68.3bn+1.5%
    EBITUSD 4.5bnUSD 4.6bnUSD 4.6bnUSD 4.6bnUSD 4.7bnUSD 4.8bnUSD 4.9bnUSD 5.0bnUSD 5.1bnUSD 5.2bn+1.5%
    NOPATUSD 3.8bnUSD 3.9bnUSD 3.9bnUSD 3.9bnUSD 4.0bnUSD 4.0bnUSD 4.1bnUSD 4.2bnUSD 4.3bnUSD 4.4bn+1.5%
    Add depreciation & amortisationUSD 902.1mUSD 906.3mUSD 912.9mUSD 921.8mUSD 933.2mUSD 947.1mUSD 963.5mUSD 982.7mUSD 1.0bnUSD 1.0bn+1.5%
    Less capital expenditureUSD -755.3mUSD -800.5mUSD -848.2mUSD -898.9mUSD -952.8mUSD -1.0bnUSD -1.1bnUSD -1.1bnUSD -1.2bnUSD -1.3bn+6.1%
    Capex, % of revenue1.3%1.3%1.4%1.5%1.5%1.6%1.7%1.7%1.8%1.9%-
    Less increase in working capitalUSD 283.7mUSD 17.5mUSD 27.1mUSD 36.9mUSD 46.9mUSD 57.2mUSD 68.0mUSD 79.3mUSD 91.1mUSD 103.7m+10.6%
    Free cashflow to firmUSD 4.3bnUSD 4.0bnUSD 4.0bnUSD 4.0bnUSD 4.0bnUSD 4.0bnUSD 4.1bnUSD 4.1bnUSD 4.2bnUSD 4.2bn-0.1%
    Discount factor0.96140.88850.82120.75900.70150.64830.59920.55380.51180.4731-
    Present valueUSD 4.1bnUSD 3.5bnUSD 3.3bnUSD 3.0bnUSD 2.8bnUSD 2.6bnUSD 2.4bnUSD 2.3bnUSD 2.1bnUSD 2.0bn-
    Present Value Of The ForecastUSD 28.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.141Reported 1.211, pulled toward 1.0 (Blume)
    Cost of equity9.72%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 6.5x interest cover. Book interest / average debt was lower, at 5.1%.
    Market capitalisationUSD 25.6bn70.2% of capital
    Total debtUSD 10.9bn29.8% of capital, book value as a proxy
    Tax rate15.4%Effective, capped at statutory
    WACC8.20%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 59.04

    55% of EV

    Forecast FCFF, final year
    USD 4.2bn
    Capex at depreciation, working capital in reinvestment
    USD 4.4bn
    Less reinvestment at g/ROIC (5.9% of NOPAT)
    USD -258.3m
    Capitalised
    USD 4.1bn
    ROIC (reported)
    42.5%
    Terminal value, undiscounted
    USD 74.4bn
    Terminal value, discounted
    USD 35.2bn
    Enterprise value
    USD 63.5bn
    Less net debt
    USD 7.2bn
    Equity value
    USD 56.3bn

    Exit at 7.2x EBITDA

    Value per shareUSD 44.44

    43% of EV

    Terminal value, undiscounted
    USD 45.0bn
    Terminal value, discounted
    USD 21.3bn
    Enterprise value
    USD 49.5bn
    Less net debt
    USD 7.2bn
    Equity value
    USD 42.3bn

    Spread between methods: 28%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.20%79.2985.1492.61102.46116.02
    7.20%64.6168.0672.2777.5184.22
    8.20%54.2956.4659.0462.1365.90
    9.20%46.6548.0849.7351.6853.98
    10.20%40.7641.7342.8344.1145.59

    Outlined: this model. Green text: above today's price of 28.43. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-4.2%2.1%-4.7%
    EBIT margin8.1%7.6%4.0%
    Discount rate-8.2%13.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.