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HP (HPQ) Stock Sinks As Market Gains: What You Should Know

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HP (HPQ - Free Report) closed the most recent trading day at $31.54, moving -1.04% from the previous trading session. This change lagged the S&P 500's 0.16% gain on the day. Elsewhere, the Dow lost 0.42%, while the tech-heavy Nasdaq added 0.48%.

Heading into today, shares of the personal computer and printer maker had lost 19.36% over the past month, lagging the Computer and Technology sector's loss of 8.85% and the S&P 500's loss of 6.79% in that time.

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 $1.05 per share, which would represent year-over-year growth of 5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.87 billion, up 3.78% from the year-ago period.

HPQ's full-year Zacks Consensus Estimates are calling for earnings of $4.31 per share and revenue of $66.13 billion. These results would represent year-over-year changes of +13.72% and +4.16%, respectively.

Investors might also notice recent changes to analyst estimates for HP. These recent revisions tend to reflect the evolving nature of short-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. HP is currently a Zacks Rank #3 (Hold).

Looking at its valuation, HP is holding a Forward P/E ratio of 7.39. For comparison, its industry has an average Forward P/E of 7.39, which means HP is trading at a no noticeable deviation to the group.

Investors should also note that HPQ has a PEG ratio of 1.85 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 industry currently had an average PEG ratio of 1.84 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 227, which puts it in the bottom 10% 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.

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


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