Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, HP (HPQ - Free Report) closed at $36.11, marking a -1.34% move from the previous day. This change lagged the S&P 500's daily loss of 1.1%. Meanwhile, the Dow lost 0.89%, and the Nasdaq, a tech-heavy index, added 0.03%.

Coming into today, shares of the personal computer and printer maker had lost 1.82% in the past month. In that same time, the Computer and Technology sector lost 5.94%, while the S&P 500 lost 1.81%.

Investors will be hoping for strength from HP as it approaches its next earnings release. On that day, HP is projected to report earnings of $1.03 per share, which would represent year-over-year growth of 11.96%. Our most recent consensus estimate is calling for quarterly revenue of $16.61 billion, up 6.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.16 per share and revenue of $65.98 billion, which would represent changes of +9.76% and +3.92%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for HP. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. HP is currently a Zacks Rank #2 (Buy).

Investors should also note HP's current valuation metrics, including its Forward P/E ratio of 8.8. Its industry sports an average Forward P/E of 18.69, so we one might conclude that HP is trading at a discount comparatively.

Investors should also note that HPQ has a PEG ratio of 3.43 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. The Computer - Mini computers was holding an average PEG ratio of 2.5 at yesterday's closing price.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 24, putting it in the top 10% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


HP Inc. (HPQ) - free report >>

Published in