HP Poly Purchase “Mildly Aggressive” Says Deutsche Bank, What’s Next?

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Ollie Martin
Updated: 29 Mar 2022

Key points:

  • Deutsche Bank analyst points to the acquisition as ‘not cheap' for the struggling tech company
  • HP's ambition to grow Poly 15% annually over the next 3 years is ‘mildly aggressive'
  • Morgan Stanley analyst sees the strategic rationale as ‘compelling'

In the latest acquisition for big tech, HP’s (NYSE: HPQ) costly acquisition of Poly turned investor attention towards the hybrid work market. The pandemic revolutionized the way we interact with the traditional work environment. Reality became digital, and crucial bits of hardware like headsets or microphones became hot products almost overnight. 


Most believe the new hybrid work structure is here to stay, and companies have already thrown large amounts of capital into the newly emerging space. HP hope to capitalize on the transformation in its acquisition of communication hardware company Poly, but it was certainly an expensive endeavor for a company that didn’t exactly thrive over the course of the pandemic. 

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Deutsche Bank analyst Sidney Ho had a few things to say about the bold move. Whilst he is encouraged that the tech giant is investing in clear growth areas with a global addressable market, Ho points out that the acquisition was “not cheap” for HP, who struggled over the pandemic and have recently been facing growing troubles regarding revenue growth. 

Albeit Poly will certainly benefit from HP’s strong supply chain and ‘cross-selling opportunities’, HP’s ambition to grow Poly revenue by 15% annually over the course of the next three years seems somewhat audacious, or perhaps better but by Sidney Ho as “mildly aggressive”.

Looking at the broader picture, Morgan Stanley analyst Erik Woodring believed the strategic rationale underpinning HP’s acquisition to be “compelling”; stating the company is on the right track to becoming the “vendor of choice in a hybrid world”. This being said, HP appears to be on the right path after a period of directional uncertainty and stagnancy of growth. 

Whether the ‘hybrid boom’ will really take off as expected is unknown, we could equally see a substantial number of workforces returning to traditional, pre-covid models. However, the likelihood of an increased need for headsets and communicative equipment remains undoubtedly higher than it would have been 1-2 years ago. HP will likely see a revenue boost from Poly, but the decision remains bold from a company that hasn't boasted the best financials lately. 


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