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HP (HPQ) Rises Higher Than Market: Key Facts

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HP (HPQ - Free Report) ended the recent trading session at $37.42, demonstrating a +1.46% swing from the preceding day's closing price. The stock outpaced the S&P 500's daily gain of 0.27%. Elsewhere, the Dow gained 0.65%, while the tech-heavy Nasdaq added 0.26%.

Shares of the personal computer and printer maker have appreciated by 4.15% over the course of the past month, outperforming the Computer and Technology sector's gain of 2.21% and the S&P 500's gain of 2%.

The investment community will be paying close attention to the earnings performance of HP in its upcoming release. The company is expected to report EPS of $0.93, up 3.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $13.96 billion, up 1% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.39 per share and a revenue of $53.46 billion, representing changes of +3.35% and -0.55%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for HP. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. HP is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, HP currently has a Forward P/E ratio of 10.89. For comparison, its industry has an average Forward P/E of 15.13, which means HP is trading at a discount to the group.

We can also see that HPQ currently has a PEG ratio of 2.69. 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 average PEG ratio for the Computer - Micro Computers industry stood at 1.79 at the close of the market yesterday.

The Computer - Micro Computers industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 233, positioning it in the bottom 8% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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