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HP

HPQ
34
Computer Hardware · Technology
Winston Score
34
Winston is serious
Below-average fundamentals — multiple weak pillars.

HP Inc. makes personal computers and printers. Its main products include laptops, desktops, and inkjet and laser printers sold to everyday consumers, students, and businesses around the world. HP is one of the largest PC makers globally and owns well-known printer brands used in homes and offices everywhere.

The company makes money by selling hardware and, importantly, by selling ink and toner cartridges on a recurring basis — that supplies business is a key profit driver. HP operates worldwide, with significant revenue from the Americas, Europe, and Asia, and generates roughly $50 billion in annual revenue. Its biggest competitive advantage is its large installed base of printers, which keeps customers buying its ink over and over, but its main risk is the long-term decline in printing demand as more people go paperless and PC sales remain tied to slow-moving replacement cycles.

Winston Score History

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+6.9% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-1.7% YoY

YoY Growth Rate

Earnings declining

Insider Activity

0.4%ownership

Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$3.2B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

HP is growing revenue at 7% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
19.6%
Thin — 19.6% gross margin
Operating Margin
5.3%
Thin — 5.3% operating margin
ROCE
5.8%
Weak — 5.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
+4.4%
Slow sales growth (4.4% YoY)
EPS YoY
-4.3%
Earnings shrinking (-4.3% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
148%
Turns 148% of profit into real cash
FCF Margin
5.1%
Thin free cash flow (5.1%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
2.85
Heavy debt load (2.85)
Interest Cover
6.38x
Adequate interest coverage (6.4x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
8.8x
no trend
Attractive valuation — P/E 8.8

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
+0.8
GROWING
Earnings roughly flat

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Dividends

Dividend Yield
4.91%
no trend
Healthy income — 4.91% yield

Generous yield. Worth checking whether the payout is sustainable.

Dividend Growth
+3.7%
no trend
Dividend growing modestly (3.7% YoY)

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