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HP (HPQ) Dips More Than Broader Markets: What You Should Know

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HP (HPQ - Free Report) closed at $38.68 in the latest trading session, marking a -0.49% move from the prior day. This move lagged the S&P 500's daily loss of 0.1%. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, lost 0.47%.

Heading into today, shares of the personal computer and printer maker had gained 5.88% over the past month, outpacing the Computer and Technology sector's loss of 1% and the S&P 500's gain of 3.67% in that time.

Wall Street will be looking for positivity from HP as it approaches its next earnings report date. On that day, HP is projected to report earnings of $1.03 per share, which would represent year-over-year growth of 11.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.61 billion, up 6.16% from the year-ago period.

HPQ's full-year Zacks Consensus Estimates are calling for earnings of $4.16 per share and revenue of $65.98 billion. These results would represent year-over-year changes of +9.76% and +3.92%, respectively.

Investors might also notice recent changes to analyst estimates for HP. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. HP currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that HP has a Forward P/E ratio of 9.35 right now. For comparison, its industry has an average Forward P/E of 19.7, which means HP is trading at a discount to the group.

Also, we should mention that HPQ has a PEG ratio of 3.64. 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. HPQ's industry had an average PEG ratio of 2.69 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 208, which puts it in the bottom 19% 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.

To follow HPQ in the coming trading sessions, be sure to utilize Zacks.com.


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