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

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HP (HPQ - Free Report) closed at $38 in the latest trading session, marking a +1.77% move from the prior day. This move outpaced the S&P 500's daily gain of 0.64%. At the same time, the Dow added 1.85%, and the tech-heavy Nasdaq gained 0.2%.

The personal computer and printer maker's stock has climbed by 3.92% in the past month, exceeding the Computer and Technology sector's gain of 1.06% and the S&P 500's gain of 3.82%.

The upcoming earnings release of HP will be of great interest to investors. On that day, HP is projected to report earnings of $0.86 per share, which would represent no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.31 billion, up 0.85% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.45 per share and revenue of $53.59 billion, indicating changes of +5.18% and -0.31%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for HP. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. HP is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note HP's current valuation metrics, including its Forward P/E ratio of 10.84. This signifies a discount in comparison to the average Forward P/E of 11.22 for its industry.

Meanwhile, HPQ's PEG ratio is currently 2.38. 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 average PEG ratio for the Computer - Mini computers industry stood at 2.38 at the close of the market yesterday.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 20, putting it in the top 8% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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