HP (HPQ) Rises Higher Than Market: Key Facts

HP (HPQ) ended the recent trading session at $19.51, demonstrating a +2.96% change from the preceding day's closing price. The stock outpaced the S&P 500's daily gain of 0.11%. Meanwhile, the Dow experienced a drop of 0.13%, and the technology-dominated Nasdaq saw an increase of 0.18%.

The personal computer and printer maker's shares have seen a decrease of 1.2% over the last month, surpassing the Computer and Technology sector's loss of 3.85% and the S&P 500's loss of 4.28%.

The upcoming earnings release of HP will be of great interest to investors. The company is forecasted to report an EPS of $0.71, showcasing no movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $14.05 billion, up 6.26% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.84 per share and a revenue of $56.83 billion, representing changes of -8.97% and +2.77%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for HP. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. HP presently features a Zacks Rank of #4 (Sell).

In terms of valuation, HP is presently being traded at a Forward P/E ratio of 6.68. This indicates a discount in contrast to its industry's Forward P/E of 12.08.

Also, we should mention that HPQ has a PEG ratio of 5.26. 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. The Computer - Micro Computers industry had an average PEG ratio of 1.74 as trading concluded yesterday.

The Computer - Micro Computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 95, putting it in the top 39% 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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