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

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In the latest trading session, HP (HPQ - Free Report) closed at $34.54, marking a -1.85% move from the previous day. This move lagged the S&P 500's daily loss of 1.84%. At the same time, the Dow lost 1.38%, and the tech-heavy Nasdaq lost 0.38%.

Prior to today's trading, shares of the personal computer and printer maker had gained 0.6% over the past month. This has outpaced the Computer and Technology sector's loss of 3.8% and the S&P 500's loss of 1.96% in that time.

HP will be looking to display strength as it nears its next earnings release, which is expected to be February 28, 2022. On that day, HP is projected to report earnings of $1.04 per share, which would represent year-over-year growth of 13.04%. Our most recent consensus estimate is calling for quarterly revenue of $16.66 billion, up 6.45% from the year-ago period.

HPQ's full-year Zacks Consensus Estimates are calling for earnings of $4.17 per share and revenue of $66.03 billion. These results would represent year-over-year changes of +10.03% and +4.01%, respectively.

Investors should also note any recent changes to analyst estimates for HP. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. HP is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, HP is currently trading at a Forward P/E ratio of 8.45. This valuation marks a discount compared to its industry's average Forward P/E of 17.6.

Investors should also note that HPQ has a PEG ratio of 3.29 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Mini computers was holding an average PEG ratio of 2.31 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 63, putting it in the top 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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