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Here's Why HP (HPQ) Stock's Rally is Likely to Continue Further
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HP Inc. (HPQ - Free Report) is currently one of the top performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals. Therefore, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio now.
The company has performed brilliantly over the past year and has the potential to carry on the momentum further.
Why an Attractive Pick?
Share-Price Appreciation: HP’s price trend reflects that the stock has had an impressive run on the bourse over the past year. Shares of the company have surged 104.2% compared with the Zacks Computer – Mini Market industry’s gain of 63.4% and the S&P 500’s 43.2%.
Solid Rank & Growth Score: HP currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2021 and fiscal 2022 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2021 and 2022 moved north by 3 cents and a penny, respectively.
Positive Earnings Surprise History: HP has an impressive earnings surprise history. The company outpaced estimates in all of the trailing four quarters, delivering an average earnings surprise of 22.7%.
Solid Growth Prospects: The Zacks Consensus Estimate of $3.34 for fiscal 2021 earnings suggests growth of 46.5% from the year-ago period. The long-term earnings per share growth rate is estimated to be 8%.
Growth Drivers: HPQ has been benefiting from rising demand for PCs amid the pandemic-induced remote-working and online learning wave. Notably, during first-quarter fiscal 2021, the company’s total PC shipment increased 15% year over year to more than 18 million units. Notebooks registered a 33% jump, while desktop units dropped 23%, year on year.
Moreover, the near-term prospects for HP’s PC division look bright. According to the latest data compiled by Gartner, global PC shipments registered fastest year-over-year growth in the first quarter of 2021 mainly on the demand spike amid the pandemic-induced work-and-learn-from-home trend.
The pandemic has necessitated the use of PC systems, be it for remote work, web-based learning, video conferencing, video gaming, social media, consumer entertainment and streaming or online shopping. In addition, as vaccine distribution and democratization takes its own time, apprehensions regarding contracting the new COVID-19 mutant strain will likely keep people confined to the safety of their homes, for quite some time.
This, in turn, boosts the prospects of the PC market in the days ahead. The momentum in the PC market is poised to sustain on solid consumer demand and supply shortage-led carry-forward of backlog into the remaining quarters of 2021.
Furthermore, stringent cost-control measures are anticipated to drive margins over the long run. Additionally, HP’s expectation of returning at least $1 billion to shareholders every quarter is encouraging.
Other Stocks to Consider
Other top-ranked stocks in the broader technology sector include Texas Instruments Incorporated (TXN - Free Report) , Immersion Corporation (IMMR - Free Report) and NVIDIA (NVDA - Free Report) , each carrying a Zacks Rank of 2, at present.
The long-term earnings per share growth rate for Texas Instruments, Immersion and NVIDIA is pegged at 9.3%, 15% and 15.2%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Here's Why HP (HPQ) Stock's Rally is Likely to Continue Further
HP Inc. (HPQ - Free Report) is currently one of the top performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals. Therefore, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio now.
The company has performed brilliantly over the past year and has the potential to carry on the momentum further.
Why an Attractive Pick?
Share-Price Appreciation: HP’s price trend reflects that the stock has had an impressive run on the bourse over the past year. Shares of the company have surged 104.2% compared with the Zacks Computer – Mini Market industry’s gain of 63.4% and the S&P 500’s 43.2%.
Solid Rank & Growth Score: HP currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2021 and fiscal 2022 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2021 and 2022 moved north by 3 cents and a penny, respectively.
Positive Earnings Surprise History: HP has an impressive earnings surprise history. The company outpaced estimates in all of the trailing four quarters, delivering an average earnings surprise of 22.7%.
Solid Growth Prospects: The Zacks Consensus Estimate of $3.34 for fiscal 2021 earnings suggests growth of 46.5% from the year-ago period. The long-term earnings per share growth rate is estimated to be 8%.
Growth Drivers: HPQ has been benefiting from rising demand for PCs amid the pandemic-induced remote-working and online learning wave. Notably, during first-quarter fiscal 2021, the company’s total PC shipment increased 15% year over year to more than 18 million units. Notebooks registered a 33% jump, while desktop units dropped 23%, year on year.
Moreover, the near-term prospects for HP’s PC division look bright. According to the latest data compiled by Gartner, global PC shipments registered fastest year-over-year growth in the first quarter of 2021 mainly on the demand spike amid the pandemic-induced work-and-learn-from-home trend.
The pandemic has necessitated the use of PC systems, be it for remote work, web-based learning, video conferencing, video gaming, social media, consumer entertainment and streaming or online shopping. In addition, as vaccine distribution and democratization takes its own time, apprehensions regarding contracting the new COVID-19 mutant strain will likely keep people confined to the safety of their homes, for quite some time.
This, in turn, boosts the prospects of the PC market in the days ahead. The momentum in the PC market is poised to sustain on solid consumer demand and supply shortage-led carry-forward of backlog into the remaining quarters of 2021.
Furthermore, stringent cost-control measures are anticipated to drive margins over the long run. Additionally, HP’s expectation of returning at least $1 billion to shareholders every quarter is encouraging.
Other Stocks to Consider
Other top-ranked stocks in the broader technology sector include Texas Instruments Incorporated (TXN - Free Report) , Immersion Corporation (IMMR - Free Report) and NVIDIA (NVDA - Free Report) , each carrying a Zacks Rank of 2, at present.
The long-term earnings per share growth rate for Texas Instruments, Immersion and NVIDIA is pegged at 9.3%, 15% and 15.2%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>