HP (HPQ) Stock Falls as the Market Rises: What You Need to Know

HP (HPQ) closed at $38.42 in the last trading session, marking a -0.72% move from the previous day. That move lagged the S&P 500’s 0.08% daily gain. Meanwhile, the Dow lost 0.56% and the Nasdaq, a technology-heavy index, lost 0.28%.

Going into today, shares of the personal computer and printer maker had gained 5.45% over the past month, outpacing the 5.11% loss in the computer and electronics sector. technology and the 0.22% gain in the S&P 500 during this period.

HP will be looking to show some strength ahead of its next earnings release. The company is expected to post EPS of $1.03, up 11.96% from the prior year quarter. Meanwhile, Zacks’ consensus estimate for revenue calls for net sales of $16.61 billion, up 6.16% from the year-ago period.

Zacks consensus estimates for the full year of HPQ call for earnings of $4.16 per share and revenue of $65.98 billion. These results would represent year-over-year variations of +9.76% and +3.92%, respectively.

Investors might also notice recent shifts in analyst estimates for HP. Recent revisions tend to reflect the latest short-term trading trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated to short-term stock prices. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable, externally audited track record of success with #1 stocks delivering an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection has remained stagnant. HP currently sports a Zacks rank of #3 (Hold).

As for its valuation, HP holds a Forward P/E ratio of 9.31. This valuation marks a discount compared to the average Forward P/E of its sector of 19.44.

It should also be noted that HPQ currently has a PEG ratio of 3.63. This popular measure is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. Computer – Minicomputer stocks hold an average PEG ratio of 2.62 based on yesterday’s closing prices.

The Computing – Minicomputers industry is part of the Computing and Technology sector. This industry currently has a Zacks Industry Ranking of 58, which places it in the top 23% of over 250 industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

To follow HPQ in future trading sessions, be sure to use Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.