To The Moon

$HP Inc(HPQ)$ is scheduled to release its fiscal Q2 2025 earnings on Wednesday, May 28, 2025, after the market close.

HP provided an outlook for Q2 2025 with an expected adjusted EPS range of $0.75 to $0.85. Analysts' consensus for Q2 2025 adjusted EPS is around $0.80.

The revenue consensus estimate for Q2 2025 is approximately $13.36 billion.

HP Inc. (HPQ) Positive Earnings Call Saw Share Price Declined By 10.61%

HP Inc. had a positive earnings call on 27 Feb 2025 but its share price declined by a significant 10.61% since.

In Q1 2025 (reported in February 2025), HP reported adjusted EPS of $0.74, which matched analyst estimates but was lower than the $0.81 reported in the same period last year. Net revenue for Q1 2025 was $13.50 billion, a 2.4% year-over-year increase, slightly surpassing the estimated $13.38 billion. Personal Systems revenue increased by 4.7% year-over-year, while Printing revenue declined by 2.4%.

The earnings call reflects a strong start to the fiscal year with positive revenue growth and strategic advancements in AI integration and market share gains. However, challenges remain in the form of weak demand in China and increased commodity costs impacting margins. Despite these challenges, HP's proactive strategies, such as the Future Ready Plan, position the company for continued growth.

HP Inc. (HPQ) Guidance for Fiscal Q2 2025

During the first quarter of fiscal year 2025, HP Inc. reported a 2% year-over-year increase in revenue, marking the third consecutive quarter of revenue growth. This was primarily driven by a 5% growth in Personal Systems revenue, with commercial revenue up 10% year-over-year, offsetting a 7% decline in consumer revenue. The company reported non-GAAP earnings per share of $0.74, slightly above the midpoint of their guidance, with operating profit margins for both Print and Personal Systems meeting expectations. Despite a 1% decline in print revenue in constant currency, HP achieved strong unit growth and market share gains in home printing.

The company anticipates delivering $1.9 billion in gross annual run-rate structural savings by the end of fiscal year 2025, up from their previous target of $1.6 billion. This is expected to help offset macroeconomic and geopolitical uncertainties and support strategic investments, including the acquisition of strategic assets from Humane to advance AI capabilities. HP also maintained confidence in its full-year outlook, projecting non-GAAP diluted EPS in the range of $3.45 to $3.75 and free cash flow between $3.2 billion and $3.6 billion.

Key Areas to Watch in HP's Q2 2025 Earnings

Personal Systems Performance: Continue to monitor the growth in the PC segment, especially the commercial business and any impact from AI PCs.

Printing Segment: Observe the trends in the printing business and HP's strategies to navigate the slow secular decline in this market.

Profitability: Pay close attention to the adjusted operating margin, which was 7.3% in Q1 2025, lower than the previous year. The guidance for Q2 suggests a similar range, so maintaining or improving margins will be crucial.

"Future Ready" Plan: Any updates on the company's cost-saving initiatives and their impact on the bottom line will be important. HP aims for $1.9 billion in savings by the end of fiscal year 2025.

Shareholder Returns: HP has been actively repurchasing shares. Investors will look for updates on the share repurchase program and dividend payouts.

Market Conditions: Commentary on the overall PC and printing market, including demand trends and competitive pressures, will be valuable.

Impact of Tariffs: Any discussion regarding the impact of US-China tariffs on HP's supply chain and costs will be closely watched.

HP Inc. (HPQ) Price Target

Based on 13 analysts from Tiger Brokers offering 12 month price targets for HP Inc in the last 3 months. The average price target is $32.33 with a high forecast of $38.00 and a low forecast of $25.00. The average price target represents a 10.27% change from the last price of $29.32.

Analysts have a cautiously optimistic stance on HP stock, with a "Moderate Buy" rating overall. The average 1-year price target is suggesting potential upside from the current trading price.

Potential Factors Influencing Q2 2025 Performance

Consumer and Commercial Demand: The strength of demand in both consumer and commercial PC markets will be a significant driver.

Component Pricing and Availability: Fluctuations in component costs and supply chain efficiencies can impact margins.

Currency Exchange Rates: As a global company, currency movements can affect HP's financial results.

Competitive Landscape: The intensity of competition in the PC and printing markets requires HP to maintain innovation and pricing strategies.

Technical Analysis - Exponential Moving Average (EMA)

If we looked at the daily time frame, it looks like HPQ is building a daily uptrend, and at time of this writing HPQ had lost only 1.30% due to the sentiment surrounding the U.S. debt ratings reduction.

We could see a stronger momentum nearer the earnings but one concern is HPQ is still trading below the 200-day period, so the daily uptrend, the bulls might not have control long enough to create a continuation.

We are seeing some signs of investors planning to take profits before the earnings because of the uncertainity coming back with tax bill and also the U.S. debt and tariffs, so we might need to be cautiously optimistic to navigate this unknown situation.

Summary

HP's fiscal Q2 2025 earnings are expected to show continued revenue in the Personal Systems segment while the Printing segment faces headwinds. The focus will likely be on maintaining profitability through cost management and the "Future Ready" plan, as well as shareholder returns.

I think I will be focused to hear any updates on the company's outlook for the remainder of the fiscal year.

Appreciate if you could share your thoughts in the comment section whether you think HPQ would be able to maintain its profitability with much better cost management..

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.