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

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HP (HPQ - Free Report) closed at $24.78 in the latest trading session, marking a -0.84% move from the prior day. This change lagged the S&P 500's daily loss of 0.65%. Meanwhile, the Dow gained 0.12%, and the Nasdaq, a tech-heavy index, added 0.03%.

Coming into today, shares of the personal computer and printer maker had lost 12.35% in the past month. In that same time, the Computer and Technology sector lost 13.29%, while the S&P 500 lost 11.07%.

HP will be looking to display strength as it nears its next earnings release. On that day, HP is projected to report earnings of $0.84 per share, which would represent a year-over-year decline of 10.64%. Meanwhile, our latest consensus estimate is calling for revenue of $15.01 billion, down 9.98% from the prior-year quarter.

HPQ's full-year Zacks Consensus Estimates are calling for earnings of $4.08 per share and revenue of $63.19 billion. These results would represent year-over-year changes of +7.65% and -0.46%, respectively.

Any recent changes to analyst estimates for HP should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.06% lower within the past month. HP is holding a Zacks Rank of #5 (Strong Sell) right now.

Investors should also note HP's current valuation metrics, including its Forward P/E ratio of 6.12. This represents a no noticeable deviation compared to its industry's average Forward P/E of 6.12.

Meanwhile, HPQ's PEG ratio is currently 2.24. 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 1.99 at yesterday's closing price.

The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 242, which puts it in the bottom 4% 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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