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HP (HPQ) to Report Q2 Earnings: What's in Store for the Stock?

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HP Inc. (HPQ - Free Report) will report first-quarter fiscal 2021 results on Feb 25.

The company estimates non-GAAP earnings between 64 cents and 70 cents. The Zacks Consensus Estimate for quarterly earnings is pinned at 65 cents per share, indicating the bottom line to have been flat year on year. The consensus mark for revenues is pegged at $15.24 billion, suggesting a year-on-year increase of 4.3%.

The company’s earnings surpassed estimates in the preceding four quarters, the surprise being 17.4%, on average.

Let’s see how things have shaped up prior to the upcoming announcement.

HP Inc. Price and EPS Surprise

HP Inc. Price and EPS Surprise

HP Inc. price-eps-surprise | HP Inc. Quote

Factors at Play

HP’s fiscal second-quarter performance is likely to have benefited from solid demand for personal systems, driven by the remote-working and online-learning trends amid the COVID-19 pandemic. Solid momentum in HP’s Chromebook, driven by high demand for notebooks, is also expected to have been a tailwind to the top line.

Moreover, continued momentum in demand for home printing is expected to have been a positive for HP’s Printing business.

However, the company expects commercial print demand to have continued to be depressed during the quarter under review.

Moreover, in its last earnings call, the company had projected that the industry-wide component supply constraints might dampen its ability to meet demand during the second quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for HP this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

HP currently has a Zacks Rank of 2 and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Digital Turbine, Inc. (APPS - Free Report) has an Earnings ESP of +6.98 and currently, a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #2, at present.

Pure Storage, Inc. (PSTG - Free Report) has an Earnings ESP of +10.81% and currently, a Zacks Rank #3.

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