HP Inc. provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments. This week, I fundamentally analyze HP’s stock. I review HP’s business, look at its key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account HP’s 2021 free cash flow of $5,827 million figure, a 3% growth rate of FCF (growth for the next 10 years), 10% discount rate, 2.92% long term growth rate (growth from 10 year mark in the future to perpetuity), 1,170 million shares outstanding, and $6,386 million of long term debt, the DCF analysis yields us an intrinsic value of $64.98 per share.
0:27 Business Overview
6:09 Key Ratios Analysis
14:23 Discounted Cash Flow Analysis / Intrinsic Value
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HP’s Website: here.
Morningstar Key Ratios Link: here.
Useful Resources here.
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