HP (HPQ) closed the most recent trading day at $36.73, moving +1.18% from the previous trading session. This change lagged the S&P 500’s 1.89% gain on the day. Elsewhere, the Dow gained 1.17%, while the tech-heavy Nasdaq added 0.75%.
Prior to today’s trading, shares of the personal computer and printer maker had lost 3.64% over the past month. This has was narrower than the Computer and Technology sector’s loss of 12.51% and the S&P 500’s loss of 7.36% in that time.
Investors will be hoping for strength from HP as it approaches its next earnings release. On that day, HP is projected to report earnings of $1.03 per share, which would represent year-over-year growth of 11.96%. Our most recent consensus estimate is calling for quarterly revenue of $16.66 billion, up 6.45% from the year-ago period.
HPQ’s full-year Zacks Consensus Estimates are calling for earnings of $4.16 per share and revenue of $66.03 billion. These results would represent year-over-year changes of +9.76% and +4.01%, respectively.
It is also important to note the recent changes to analyst estimates for HP. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% higher. HP is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, HP is currently trading at a Forward P/E ratio of 8.72. For comparison, its industry has an average Forward P/E of 18.5, which means HP is trading at a discount to the group.
Investors should also note that HPQ has a PEG ratio of 3.4 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Computer – Mini computers was holding an average PEG ratio of 2.33 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 198, which puts it in the bottom 23% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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