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HP (HPQ) Stock Sinks As Market Gains: What You Should Know

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HP (HPQ - Free Report) closed at $27.75 in the latest trading session, marking a -1.94% move from the prior day. This change lagged the S&P 500's daily gain of 0.41%.

Heading into today, shares of the personal computer and printer maker had lost 1.22% over the past month, outpacing the Computer and Technology sector's loss of 7.83% and the S&P 500's loss of 4.08% in that time.

Wall Street will be looking for positivity from HPQ as it approaches its next earnings report date. In that report, analysts expect HPQ to post earnings of $0.89 per share. This would mark year-over-year growth of 43.55%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.47 billion, up 1.37% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.74 per share and revenue of $62.24 billion. These totals would mark changes of +64.04% and +9.89%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for HPQ. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. HPQ is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note HPQ's current valuation metrics, including its Forward P/E ratio of 7.58. Its industry sports an average Forward P/E of 17.61, so we one might conclude that HPQ is trading at a discount comparatively.

Investors should also note that HPQ has a PEG ratio of 0.92 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Mini computers stocks are, on average, holding a PEG ratio of 1.13 based on yesterday's closing prices.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 11, putting it in the top 5% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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