HPQ has now reported — the stock closed at $30.52, up 3.4% on the day, extending an 18.5% one-month rally that has already run well past what most analysts think the stock is worth.
The short side added conviction into the release rather than retreating from it. Short interest jumped 17% in a single session on August 25, pushing the SI figure to 8.7% of the free float — a sharp rebuild after a steady decline from the 11% range seen in mid-July. That move is now being tested directly by the post-earnings price reaction. Borrow conditions remain unthreatening: availability is a loose 367%, well above the 52-week low of 239%, and cost to borrow is a negligible 0.50%. Short sellers pressed fresh bets with easy, cheap access to the trade. Options traders moved in the same direction — the put/call ratio hit 1.54 on the day of the print, nearly 1.8 standard deviations above its 20-day average of 1.29 and approaching the 52-week high of 1.66. Both signals leaned the same way: defensive.
The analyst community has sharpened its bearish case at the margin. Morgan Stanley cut its target to $17 on August 24, maintaining its Underweight rating — the stock now trades at nearly 80% above that level. Evercore ISI moved the other way, lifting its target to $32 from $25 while staying at In-Line. Goldman Sachs reiterated its Sell at $21 on August 12. The consensus mean target is $27.32, roughly 10% below current levels — a smaller gap than the 22% discount noted ahead of the May print, but still a clear vote of no-confidence from the Street. Bulls hold the valuation argument: P/E near 10x and EV/EBITDA around 7.7x remain discounted for the hardware sector, and the 17% single-session surge after the May print shows HPQ can deliver genuine upside surprises. Bears counter that the rally has already priced in the good news, with virtually no major firm willing to put a buy rating on the stock at current levels.
Peer performance adds context to the day's move. DELL gained 4.2% on the same session, suggesting sector-wide tailwinds rather than an HPQ-specific re-rating. NTAP and HPE were comparatively flat on the week, each dropping more than 4% over the prior five days. HPQ's one-week gain of 1.9% looks modest against that backdrop, though the one-month surge puts it far ahead of the peer group.
The print now resolves whether the rebuilt short position was prescient or premature — and whether the Street's near-universal caution on valuation finally finds traction against a stock that has twice confounded consensus this year.
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