What Did NetApp Do That HP Did Not

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Consider two companies in the technology hardware and storage industry. Counting dividends, one stock returned 173.6% over the five years to October 2026, and the other returned 36.6%. The first is NetApp (NTAP), and the second is HP (HPQ). If you had to guess, where did that gap come from: faster sales growth, bigger profits, or investors paying more for each dollar of profit?

Who Has Beaten HP Over Five Years?

Most of the industry has not. Over the five years to October 2026, HP's stock beat 12 of 20 industry peers. NetApp, however, finished 137.0 points ahead of HP. Its yearly sales growth over the last three years averaged 6.1%, against 2.8% for HP.

NetApp is the only peer to clear the screen behind this table. That filter captures companies in the same industry worth at least $2 billion, whose yearly sales growth over three years was within 4 points of HP's. To pass, a peer must beat HP's stock in at least two of the three periods and outperform it by 20 points or more over five years. The median stock in the industry gained 16.3% over those five years, placing HP ahead of most of its industry. Among peers with a similar yearly sales pace, though, NetApp left HP far behind.

Did NetApp Grow Faster Than HP?

It did. Over the last three years, NetApp's sales grew an average of 6.1% a year, compared with 2.8% for HP. NetApp sells software, systems and cloud services that companies use to store and manage their data.

The difference is wider over five years. Between 2021 and 2026, NetApp's sales rose 25.3%, while HP's fell 4.7%. NetApp therefore grew sales faster, and that is part of the gap between the two stocks.

Where Did The Gap Come From?

Most of the gap came from profit per share. Between 2021 and 2026, NetApp's earnings per share rose 89.1%, while HP's fell 18.6%. As NetApp grew, the company kept more of each dollar of sales: its operating margin widened by 8.1 points.

Investors do pay more for each dollar of NetApp's profit, giving the stock a multiple of 30.7 times earnings today against 21.3 times in 2021. HP's multiple rose by a similar proportion, though, going from 8.8 times in 2021 to 12.8 times today. NetApp did not pull ahead on the multiple; it pulled ahead on what it earned per share.

HP's own operating margin narrowed by 2.0 points over the same years. The company gets most of its sales from Personal Systems, its PC business. In fiscal Q3 2026, management put that business's operating margin at 4.6% on its own adjusted measure. Printing's margin landed at 18.1% on the same measure, helped by tariff refunds.

What To Watch In HP's Next Report

Management expects HP's margins to remain under pressure for now. On the fiscal Q3 2026 call on August 26, 2026, management said it expects input costs to keep rising, putting near-term pressure on operating margins, particularly in Personal Systems. In Personal Systems, the company also expects the fiscal Q4 margin to come in below the third quarter's, then to improve as HP moves into fiscal 2027.

How To Act On HPQ?

Not necessarily on HP alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here is one company from HP's own industry that has beaten it. Over the five years to October 2026, NetApp stock rose 173.6%, while HP stock rose 36.6%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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