HPQ — Valuation Models

Interactive models with editable assumptions. All calculations run client-side.

Valuation Summary

Model	Intrinsic Value	vs Price ($18.99)
DCF	$51.92	+173.4%
Graham Number	—	—
Reverse DCF	—	implied g: -6.5%
DDM	$24.72	+30.2%
EV/EBITDA	$18.92	-0.4%

Values reflect default assumptions. Adjust inputs in each model below to update.

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $2.83B

Near-term growth (yrs 1–5)(%)Rev: 6.9% / EPS: -1.7%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 8.06%

Computed WACC: 8.06%

Cost of equity (Re)10.88%(Rf 4.30% + β 1.20 × ERP 5.50%)

Cost of debt (Rd)4.42%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)61.87%

Debt weight (D/V)38.13%

Results

Intrinsic Value / share$62.59

Current Price$18.99

Upside / Downside+229.6%

Net Debt (used)$7.78B

Sensitivity: WACC (rows) × Near-term g (cols)

WACC \ Near-term	-1.1%	2.9%	6.9%	10.9%	14.9%
7.0%	$53.20	$65.53	$79.83	$96.36	$115.35
8.0%	$42.02	$51.92	$63.39	$76.62	$91.81
9.0%	$34.29	$42.51	$52.02	$62.98	$75.55
10.0%	$28.62	$35.61	$43.70	$53.00	$63.66
11.0%	$24.28	$30.34	$37.34	$45.39	$54.60

2 — Graham Number

Assumptions

MultiplierGraham used 22.5 (15× P/E × 1.5× P/B)

EPS (trailing)($)Yahoo: $2.65

Book Value / share($)Yahoo: $-0.83

Results

Graham Number requires positive EPS and positive Book Value per share. BVPS is zero or negative.

Graham Number—

Current Price$18.99

Margin of Safety—

Formula: √(22.5 × max(0,EPS) × max(0,BVPS))

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 8.06%

Terminal growth rate(%)

Computed WACC: 8.06%

Cost of equity (Re)10.88%(Rf 4.30% + β 1.20 × ERP 5.50%)

Cost of debt (Rd)4.42%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)61.87%

Debt weight (D/V)38.13%

Results

Current Price$18.99

Implied Near-term FCF Growth-8.7%

Historical Revenue Growth6.9%

Historical Earnings Growth-1.7%

Base FCF (TTM)$2.83B

Implied growth is the FCF growth rate (yrs 1–5) that makes the DCF intrinsic value equal the current price. Long-term growth is set to half the implied near-term rate.

4 — Dividend Discount Model (DDM)

Assumptions

Annual dividend D0($/share)Yahoo: $1.20

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$24.72

Current Price$18.99

Upside / Downside+30.2%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $4.46B

Target EV/EBITDA multipleCurrent: 5.6×

Net Debt($B)Default: $7.78B

Results

Implied Equity Value / share$18.92

Current Price$18.99

Upside / Downside-0.4%

Implied EV$25.15B

Sensitivity: EV/EBITDA multiple (rows) × Net Debt (cols)

Mult \ Net Debt	$3.78B	$5.78B	$7.78B	$9.78B	$11.78B
1.6x	$3.86	$1.68	$-0.50	$-2.68	$-4.86
3.6x	$13.57	$11.39	$9.21	$7.03	$4.85
5.6x	$23.28	$21.10	$18.92	$16.74	$14.56
7.6x	$32.99	$30.81	$28.63	$26.45	$24.27
9.6x	$42.70	$40.52	$38.34	$36.16	$33.98

← Overview Financial Statements ← Companies