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

This story originally appeared on Zacks

HP (HPQ) closed at $38.68 in the last trading session, recording a -0.49% move from the day before. The move delayed the S&P 500’s daily loss of 0.1%. Meanwhile, the Dow lost 0.47%, and the tech-heavy Nasdaq lost 0.47%.

– Zacks

Heading into the day, PC shares and the printer maker are up 5.88% over the past month, outpacing the computer and technology sector’s 1% loss and the S&P 500’s 3.67% gain in that time.

Wall Street will be looking for the positive from HP as it approaches the next earnings report date. On that day, HP is expected to report earnings of $1.03 per share, which represents 11.96% year-over-year growth. Meanwhile, the Zacks Consensus revenue report expects net sales to be $16.61 billion, up 6.16% from the same period last year.

HPQ’s full-year Zacks consensus estimates call for earnings of $4.16 per share and revenue of $65.98 billion. These results will represent annual changes of +9.76% and +3.92%, respectively.

Investors may also notice recent changes in analyst estimates for HP. These reviews help show the ever-changing nature of near-term business trends. With this in mind, we can take the positive rating reviews as a sign of optimism about the company’s business outlook.

Our research shows that these discretionary changes are directly correlated with near-term stock prices. To take advantage of this, we have developed Zacks Rank, a proprietary model that takes these discretionary changes into account and provides an actionable ranking system.

The Zacks Rank system, which ranges from #1 (strong buy) to #5 (strong sell), has an impressive externally audited track record of outperformance, with the #1 stock delivering a +25% average annual return since 1988. The shadow Zacks Consensus EPS is flat over the past month. HP currently has a Zacks rating of 3 (commentary).

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

Also, we have to mention that HPQ has a PEG ratio of 3.64. This metric is used similarly to the popular P/E ratio, but the PEG ratio also takes into account the expected earnings growth rate for the stock. HPQ Industry’s average price-wage ratio was 2.69 as of yesterday’s close.

Computer – The miniature computer industry is part of the computer and technology sector. The industry currently has a Zacks Industry Rating of 208, placing it at the bottom 19% of all 250+ industries.

Zacks Industry Ranking measures the strength of our industry groups by measuring the average Zacks rating of the individual stocks within the groups. Our research shows that industries ranked 50% outperform the bottom half by a factor of 2 to 1.

To follow HPQ in upcoming trading sessions, be sure to use Zacks.com.

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