Price to Sales (P/S)
since 2005
Calculation
HP Inc., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Net revenue1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 13, 2018 | 0.59 | = | 22.29 | ÷ | 37.64 | 37.64 | = | 58,472 | ÷ | 1,553,494,507 | |
| Dec 14, 2017 | 0.66 | = | 20.74 | ÷ | 31.64 | 31.64 | = | 52,056 | ÷ | 1,645,228,387 | |
| Dec 15, 2016 | 0.55 | = | 15.51 | ÷ | 28.28 | 28.28 | = | 48,238 | ÷ | 1,705,451,042 | |
| Dec 16, 2015 | 0.21 | = | 12.26 | ÷ | 57.68 | 57.68 | = | 103,355 | ÷ | 1,791,848,366 | |
| Dec 18, 2014 | 0.66 | = | 39.82 | ÷ | 60.77 | 60.77 | = | 111,454 | ÷ | 1,834,081,993 | |
| Dec 30, 2013 | 0.48 | = | 28.07 | ÷ | 58.83 | 58.83 | = | 112,298 | ÷ | 1,908,777,048 | |
| Dec 27, 2012 | 0.23 | = | 14.04 | ÷ | 61.78 | 61.78 | = | 120,357 | ÷ | 1,948,148,051 | |
| Dec 14, 2011 | 0.41 | = | 26.38 | ÷ | 64.13 | 64.13 | = | 127,245 | ÷ | 1,984,033,497 | |
| Dec 15, 2010 | 0.72 | = | 41.23 | ÷ | 57.54 | 57.54 | = | 126,033 | ÷ | 2,190,425,610 | |
| Dec 17, 2009 | 1.04 | = | 50.56 | ÷ | 48.45 | 48.45 | = | 114,552 | ÷ | 2,364,168,918 | |
| Dec 18, 2008 | 0.72 | = | 35.37 | ÷ | 48.99 | 48.99 | = | 118,364 | ÷ | 2,416,201,335 | |
| Dec 18, 2007 | 1.26 | = | 51.02 | ÷ | 40.52 | 40.52 | = | 104,286 | ÷ | 2,573,868,626 | |
| Dec 22, 2006 | 1.21 | = | 40.63 | ÷ | 33.69 | 33.69 | = | 91,658 | ÷ | 2,720,808,149 | |
| Dec 21, 2005 | 0.94 | = | 28.77 | ÷ | 30.55 | 30.55 | = | 86,696 | ÷ | 2,837,653,721 |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of HP Inc. Annual Report.
The valuation of the equity relative to its revenue exhibits a long-term contraction between 2005 and 2018. While the initial period was characterized by valuation expansion, the subsequent decade saw a significant compression of the price-to-sales (P/S) ratio, indicating a shift in market perception regarding the value attributed to the company's revenue streams.
- Price-to-Sales Ratio Trajectory
- A period of valuation growth occurred between 2005 and 2007, with the P/S ratio peaking at 1.26. Following this peak, a sustained downward trend emerged, reaching a cyclical low of 0.21 in 2015. This represents a substantial reduction in the multiple the market was willing to pay for each dollar of sales over a ten-year period.
- Relationship Between Share Price and Sales per Share
- Between 2005 and 2011, sales per share grew consistently from 30.55 to a peak of 64.13. However, the share price failed to maintain pace with this revenue growth after 2009. This divergence drove the compression of the P/S ratio, as significant revenue increases were offset by declining market prices, most notably between 2011 and 2012 when the ratio fell from 0.41 to 0.23.
- Post-2016 Valuation Stabilization
- A sharp reduction in sales per share occurred in 2016, dropping to 28.28. This contraction coincided with a rebound in the P/S ratio, which rose from 0.21 in 2015 to 0.55 in 2016, subsequently stabilizing between 0.59 and 0.66 through 2018. This indicates a reset in the valuation baseline and a moderate recovery in the market's valuation of revenue following the structural change in sales per share.
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Comparison to Competitors
HP Inc., P/S, long-term trends, comparison to competitors
| HP Inc. | Apple Inc. | Arista Networks Inc. | Cisco Systems Inc. | Dell Technologies Inc. | Lumentum Holdings Inc. | Super Micro Computer Inc. | |
|---|---|---|---|---|---|---|---|
| Dec 13, 2018 | 0.59 | 3.60 | 9.29 | 4.38 | — | 3.46 | 0.33 |
| Dec 14, 2017 | 0.66 | 3.86 | 11.20 | 3.28 | — | 3.44 | 0.40 |
| Dec 15, 2016 | 0.55 | 2.86 | 7.49 | 3.20 | — | 2.34 | 0.47 |
| Dec 16, 2015 | 0.21 | 2.85 | 5.52 | 2.71 | — | 1.20 | 0.65 |
| Dec 18, 2014 | 0.66 | 3.37 | 7.82 | 2.69 | — | — | 0.82 |
| Dec 30, 2013 | 0.48 | 2.76 | — | 2.66 | — | — | 0.48 |
| Dec 27, 2012 | 0.23 | 3.58 | — | 2.19 | — | — | 0.54 |
| Dec 14, 2011 | 0.41 | 3.44 | — | 2.03 | — | — | 0.54 |
| Dec 15, 2010 | 0.72 | 4.33 | — | 3.02 | — | — | 0.51 |
| Dec 17, 2009 | 1.04 | 4.87 | — | 3.70 | — | — | 0.55 |
| Dec 18, 2008 | 0.72 | 2.83 | — | 3.33 | — | — | 0.62 |
| Dec 18, 2007 | 1.26 | 5.99 | — | 5.59 | — | — | 0.61 |
| Dec 22, 2006 | 1.21 | 3.77 | — | 4.87 | — | — | — |
| Dec 21, 2005 | 0.94 | 4.34 | — | 4.60 | — | — | — |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).
Comparison to Sector (Technology Hardware & Equipment)
HP Inc., P/S, long-term trends, comparison to sector (technology hardware & equipment)
| HP Inc. | Technology Hardware & Equipment | |
|---|---|---|
| Dec 13, 2018 | 0.59 | 3.72 |
| Dec 14, 2017 | 0.66 | 3.77 |
| Dec 15, 2016 | 0.55 | 2.92 |
| Dec 16, 2015 | 0.21 | 2.81 |
| Dec 18, 2014 | 0.66 | 3.23 |
| Dec 30, 2013 | 0.48 | 2.73 |
| Dec 27, 2012 | 0.23 | 3.25 |
| Dec 14, 2011 | 0.41 | 3.02 |
| Dec 15, 2010 | 0.72 | 3.81 |
| Dec 17, 2009 | 1.04 | 4.26 |
| Dec 18, 2008 | 0.72 | 3.08 |
| Dec 18, 2007 | 1.26 | 5.72 |
| Dec 22, 2006 | 1.21 | 4.43 |
| Dec 21, 2005 | 0.94 | 4.50 |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).
Comparison to Industry (Information Technology)
HP Inc., P/S, long-term trends, comparison to industry (information technology)
| HP Inc. | Information Technology | |
|---|---|---|
| Dec 13, 2018 | 0.59 | 4.31 |
| Dec 14, 2017 | 0.66 | 4.18 |
| Dec 15, 2016 | 0.55 | 3.46 |
| Dec 16, 2015 | 0.21 | 3.03 |
| Dec 18, 2014 | 0.66 | 3.31 |
| Dec 30, 2013 | 0.48 | 2.85 |
| Dec 27, 2012 | 0.23 | 2.88 |
| Dec 14, 2011 | 0.41 | 2.84 |
| Dec 15, 2010 | 0.72 | 3.04 |
| Dec 17, 2009 | 1.04 | 3.11 |
| Dec 18, 2008 | 0.72 | 2.38 |
| Dec 18, 2007 | 1.26 | 5.73 |
| Dec 22, 2006 | 1.21 | 5.21 |
| Dec 21, 2005 | 0.94 | 5.62 |
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).