HP (HPQ) Could Be 30% Above Fair Value On Raised 2026 Guidance

HP (HPQ) is in focus after third quarter results showed higher revenue from its Personal Systems segment, even as unit shipments declined, and management raised full year 2026 earnings and free cash flow guidance.

HP shares have responded positively to the earnings beat and raised 2026 guidance, with a 1 month share price return of 11.92% and a year-to-date share price return of 37.97%, while the 1 year total shareholder return of 12.43% points to more moderate longer-term progress.

Scan beyond HP and see how other companies exposed to AI PCs and premium hardware are positioning for a potential breakout with our hand-picked 56 AI infrastructure stocks.

After a sharp rerating on higher 2026 guidance and AI PC enthusiasm, the question now is whether HP’s recent 1 month jump has already captured most of the opportunity, or whether the current valuation still leaves meaningful upside on the table.

Most Popular Narrative: 30.4% Overvalued

HP closed at $30.52 compared with a most widely followed fair value estimate of $23.41. That gap frames how much optimism is already priced in.

Accelerating adoption of AI-driven PCs and growth in premium device segments are fueling stronger-than-expected revenue growth, with AI PCs now over 25% of HP's mix and expected price uplifts of 5 to 10%, which directly supports higher top-line sales and margin expansion. Read the complete narrative.

Want to see what sits behind that confidence in AI PCs and margin support. The narrative leans on modest revenue growth, slightly higher profitability, and a lower future earnings multiple than many US tech peers. The full breakdown shows how those pieces combine into that $23.41 fair value.

Result: Fair Value of $23.41 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, HP’s print headwinds and intense PC pricing pressure could still weigh on margins and earnings, especially if AI PC demand or Windows 11 refresh benefits fade.

Find out about the key risks to this HP narrative.

Another View on HP Valuation

There is a sharp contrast when you look at HP through its P/E ratio instead of the analyst fair value. The stock trades on 11.2x earnings compared with 19.4x for the global tech industry and a fair ratio of 26x, which implies the market is pricing in much lower expectations. Is that caution justified or an opening for patient investors?

To see how this earnings based view compares with a fuller valuation breakdown, including industry and peer comparisons, take a closer look at our valuation workup for HP. See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment on HP finely balanced between optimism on AI PCs and concern about margin pressure, it makes sense to review the data yourself and move fast if you want to shape your own view. A good place to start is with the full breakdown of 4 key rewards and 2 important warning signs.

Looking for more ideas beyond HP?

If you stop with HP, you miss a wider set of opportunities. Use the Simply Wall St screener to uncover stocks that better match your goals and risk comfort.

• Target resilience by reviewing companies that score well on balance sheet strength through our list of solid balance sheet and fundamentals (52 results).
• Hunt for potential value by checking companies that currently screen as attractively priced using our 45 high quality undervalued stocks.
• Focus on stability and income by scanning for higher yielding opportunities through the 12 dividend fortresses.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com