In the latest trading session, HP (HPQ) closed at $30.85, marking a +1.28% move from the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.33%. At the same time, the Dow added 1.08%, and the tech-heavy Nasdaq gained 0.08%.
Heading into today, shares of the personal computer and printer maker had lost 6.85% over the past month, lagging the Computer and Technology sector's gain of 1.62% and the S&P 500's gain of 1.41%.
The investment community will be paying close attention to the earnings performance of HP in its upcoming release. The company's upcoming EPS is projected at $0.75, signifying a 19.35% drop compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $15.47 billion, reflecting a 5.69% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.23 per share and a revenue of $60.01 billion, indicating changes of +3.53% and +8.52%, respectively, from the former year.
It's also important for investors to be aware of any recent modifications to analyst estimates for HP. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 remained steady. Right now, HP possesses a Zacks Rank of #1 (Strong Buy).
Looking at valuation, HP is presently trading at a Forward P/E ratio of 9.43. This valuation marks a discount compared to its industry average Forward P/E of 19.47.
We can also see that HPQ currently has a PEG ratio of 1.58. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Computer - Micro Computers industry was having an average PEG ratio of 1.58.
The Computer - Micro Computers industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 16, finds itself in the top 7% echelons of all 250+ industries.
The Zacks Industry Rank is ordered 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).