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HP (HPQ) Gains But Lags Market: What You Should Know

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In the latest trading session, HP (HPQ - Free Report) closed at $27.06, marking a +1.01% move from the previous day. This move lagged the S&P 500's daily gain of 1.19%. Meanwhile, the Dow gained 1.34%, and the Nasdaq, a tech-heavy index, lost 0.18%.

Coming into today, shares of the personal computer and printer maker had gained 5.68% in the past month. In that same time, the Computer and Technology sector lost 2.47%, while the S&P 500 lost 0.84%.

Investors will be hoping for strength from HP as it approaches its next earnings release. In that report, analysts expect HP to post earnings of $0.84 per share. This would mark a year-over-year decline of 10.64%. Our most recent consensus estimate is calling for quarterly revenue of $14.76 billion, down 11.51% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.08 per share and revenue of $62.94 billion, which would represent changes of +7.65% and -0.86%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for HP. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. HP is currently sporting a Zacks Rank of #4 (Sell).

Investors should also note HP's current valuation metrics, including its Forward P/E ratio of 6.56. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 6.56.

It is also worth noting that HPQ currently has a PEG ratio of 2.4. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Mini computers industry currently had an average PEG ratio of 2.11 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 241, putting it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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