HP (HPQ) ended the recent trading session at $22.96, demonstrating a +1.59% change from the preceding day’s closing price. The stock outpaced the S&P 500’s daily loss of 0.45%. Elsewhere, the Dow saw a downswing of 0.25%, while the tech-heavy Nasdaq depreciated by 1.16%.
Shares of the personal computer and printer maker witnessed a loss of 10.95% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 0.38%, and the S&P 500’s gain of 2.14%.
The investment community will be paying close attention to the earnings performance of HP in its upcoming release. The company is expected to report EPS of $0.66, down 12% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $14.62 billion, reflecting a 4.91% rise from the equivalent quarter last year.
HPQ’s full-year Zacks Consensus Estimates are calling for earnings of $2.98 per share and revenue of $58.27 billion. These results would represent year-over-year changes of -4.49% and +5.39%, respectively.
It is also important to note the 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 business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there’s been no change in the Zacks Consensus EPS estimate. HP presently features a Zacks Rank of #3 (Hold).
From a valuation perspective, HP is currently exchanging hands at a Forward P/E ratio of 7.59. This indicates a discount in contrast to its industry’s Forward P/E of 21.93.
Investors should also note that HPQ has a PEG ratio of 3.81 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 average PEG ratio for the Computer – Micro Computers industry stood at 2.72 at the close of the market yesterday.
The Computer – Micro Computers industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 21, positioning it in the top 9% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
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