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HP (HPQ) Stock Drops Despite Market Gains: Important Facts to Note

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HP (HPQ - Free Report) closed the most recent trading day at $34.75, moving -0.03% from the previous trading session. This change lagged the S&P 500's daily gain of 0.38%. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq gained 0.03%.

The personal computer and printer maker's shares have seen a decrease of 8.53% over the last month, not keeping up with the Computer and Technology sector's loss of 7.5% and the S&P 500's loss of 3.2%.

The investment community will be closely monitoring the performance of HP in its forthcoming earnings report. The company is scheduled to release its earnings on August 28, 2024. In that report, analysts expect HP to post earnings of $0.86 per share. This would mark no growth from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $13.31 billion, showing a 0.85% escalation compared to the year-ago quarter.

HPQ's full-year Zacks Consensus Estimates are calling for earnings of $3.45 per share and revenue of $53.59 billion. These results would represent year-over-year changes of +5.18% and -0.31%, respectively.

Investors might also notice recent changes to analyst estimates for HP. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Currently, HP is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, HP is at present trading with a Forward P/E ratio of 10.09. This valuation marks a discount compared to its industry's average Forward P/E of 11.64.

We can also see that HPQ currently has a PEG ratio of 2.21. 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. As of the close of trade yesterday, the Computer - Micro Computers industry held an average PEG ratio of 1.65.

The Computer - Micro Computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 98, putting it in the top 39% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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