Abstract

HP Inc will report fiscal third quarter 2026 results on August 26, 2026 Post-Mkt; current consensus points to revenue of 14.34 billion US dollars and adjusted EPS of 0.66, with year-over-year revenue growth of 4.72% and EPS down 12.25%.

Market Forecast

Consensus for the fiscal third quarter calls for revenue of 14.34 billion US dollars, up 4.72% year over year, adjusted EPS of 0.66, down 12.25%, and EBIT of 859.59 million US dollars, down 13.74% year over year. The company has not provided margin-specific guidance for the quarter; investor focus remains on the sustainability of gross margin and the behavior of operating costs into the second half. Management execution remains centered on monetizing the personal computing upgrade cycle and stabilizing print profitability through supplies and subscription attach, while component-cost dynamics and pricing discipline set the margin trajectory. The most promising demand engine continues to be Personal Systems, which generated 10.21 billion US dollars last quarter and stands to benefit from enterprise PC refresh and feature upgrades, though segment-level YoY guidance was not disclosed.

Last Quarter Review

In the previous reported quarter, HP Inc delivered revenue of 14.41 billion US dollars, a gross profit margin of 20.93%, GAAP net profit attributable to shareholders of 0.45 billion US dollars, a net profit margin of 3.12%, and adjusted EPS of 0.86, which rose 21.13% year over year. A key highlight was the outperformance versus consensus on both revenue and profitability, with EBIT of 1.08 billion US dollars and EPS momentum supported by mix and operating expense control. By business, Personal Systems revenue was 10.21 billion US dollars and Printing revenue was 4.20 billion US dollars, with overall company revenue up 8.99% year over year.

Current Quarter Outlook

Personal Systems into fiscal Q3: pricing, mix, and refresh cadence

Personal Systems is poised to remain the decisive earnings driver this quarter, following a 10.21 billion US dollars contribution in the last print. The core question for investors is how much of last quarter’s upside has pulled forward demand versus signaling a durable run-rate as enterprises continue standardized refresh and device upgrades. Pricing discipline, the mix between commercial notebooks and desktops, and attach rates for services and peripherals will determine whether top-line growth converts to margin consistency. With industry conversations noting that memory costs have been rising through mid-year, unit and configuration choices may require surgical pricing and promotion to preserve blended gross margins without eroding share or customer satisfaction. Management’s ability to navigate discounting around seasonal promotions while leaning on richer configurations, security features, and service bundling should shape the profit conversion in fiscal Q3. Execution on channel inventory health also matters: clean channels reduce future discounting pressure and smooth reorder patterns, supporting steadier sell-in and sell-through alignment.

Printing and supplies: stability, subscription attach, and margin carry

Printing remains a cash-generation anchor and a margin stabilizer, contributing 4.20 billion US dollars last quarter. The mechanics this quarter revolve around supplies demand normalization, Instant Ink and broader subscription attach, and average selling prices across hardware categories. Supply chain and component-cost inputs, including print consumables and logistics, will influence segment margin carry into year-end, but the lever remains the extent to which higher-margin supplies and services offset variability in entry-level hardware units. The segment’s balance between consumer and small-business demand is also relevant; SMB ordering patterns tied to project cycles and office reopen dynamics can pace quarterly shipments and supplies replenishment. Management’s priority is to maintain profitability by deepening recurring revenue from services and subscriptions, while ensuring hardware placement supports long-term supplies monetization rather than near-term units at the expense of future margin. Investors will parse commentary on channel inventory and refill frequencies as proxies for steady-state supplies consumption and the durability of cash flows from the installed base.

What likely drives the stock this quarter: gross margin trajectory and guidance credibility

The headline swing factor for shares is the trajectory of gross margin versus expectations, given component-cost volatility and the need for disciplined pricing. Consensus looks for top-line growth of 4.72% year over year, but with EBIT and EPS implied to decline year over year, the market is keyed to whether margins compress more than anticipated or show resilience through mix and cost control. Any update on full-year profit parameters will be parsed for credibility and cadence into the fiscal fourth quarter, especially after commentary earlier in the year that suggested a tighter full-year profit envelope. If management can demonstrate that higher input costs are being offset by richer configuration mix, services attach, and expense discipline, investors may look through near-term EPS pressure; if not, multiple compression risk could linger. Color on channel health, backlog quality, and the momentum of commercial rollouts should frame how much of Q3 demand is seasonal versus structural, which directly bears on the second-half earnings cadence and the confidence band around the exit run-rate.

Analyst Opinions

Directional views tracked during the period show a bearish tilt, with bearish at 100% and bullish at 0% among non-neutral opinions, while multiple other notes stayed neutral. A well-followed institution highlighted downside risk: Wells Fargo’s Aaron Rakers maintained a Sell rating with a 20.00 US dollars price target, flagging concerns around the durability of PC demand normalization, the impact of rising memory costs on margin resilience, and the potential for guidance to remain conservative. Additional commentary published in late May indicated that management trimmed the upper end of its full-year profit framework, reinforcing caution on the second-half earnings power and the likelihood that portions of growth were pulled forward. Neutral stances from Citi (Asiya Merchant, Hold) and Bernstein (Mark Newman, Hold) underscore the debate on valuation support versus near-term earnings compression; however, because the directional skew among explicit calls is bearish, the majority opinion centers on the risk that consensus underestimates margin pressure in fiscal Q3. The bearish camp expects: - Mix-shift and higher component inputs, led by memory, to cap gross margin upside despite the lift from commercial PC refresh and services attach. - Segment-level variability, with Printing profitability depending on supplies replenishment patterns and subscription scaling, which may not fully counterbalance softer hardware pricing if promotional intensity rises. - Guidance signaling to err on the side of caution, limiting near-term multiple expansion until there is clearer evidence that top-line momentum converts to stable EPS growth. This view frames the setup as a test of margin quality and forecast credibility rather than a question of demand existence. The takeaway for investors focused on the near-term print is that even with revenue projected to rise by 4.72% year over year, the bar for positive surprise likely sits on the gross margin line and the tone of the full-year bridge to earnings, more than on the absolute revenue number. If the company sustains last quarter’s 20.93% gross margin neighborhood while demonstrating expense discipline, it could mitigate the year-over-year EPS decline implied by consensus. In contrast, a visible step-down in margin or a tighter guide could validate the bearish stance and keep sentiment contained despite stable top-line trends.