In the latest close session, HP (HPQ) was down 6.91% at $30.20. This change lagged the S&P 500's daily gain of 0.6%. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 0.64%.
Heading into today, shares of the personal computer and printer maker had lost 0.89% over the past month, lagging the Computer and Technology sector's gain of 4.03% and the S&P 500's gain of 1.34%.
The investment community will be paying close attention to the earnings performance of HP in its upcoming release. In that report, analysts expect HP to post earnings of $0.75 per share. This would mark a year-over-year decline of 19.35%. 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.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.23 per share and revenue of $60.01 billion, indicating changes of +3.53% and +8.52%, respectively, compared to the previous year.
It's also important for investors to be aware of any recent modifications to analyst estimates for HP. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. HP currently has a Zacks Rank of #1 (Strong Buy).
From a valuation perspective, HP is currently exchanging hands at a Forward P/E ratio of 10.04. For comparison, its industry has an average Forward P/E of 22.02, which means HP is trading at a discount to the group.
It's also important to note that HPQ currently trades at a PEG ratio of 1.69. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Computer - Micro Computers industry stood at 1.69 at the close of the market yesterday.
The Computer - Micro Computers industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 17, this industry ranks in the top 7% of all industries, numbering over 250.
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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).