In the latest trading session, HP (HPQ) closed at $19.59, marking a -1.46% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.24%. Elsewhere, the Dow saw a downswing of 0.01%, while the tech-heavy Nasdaq depreciated by 0.26%.
The personal computer and printer maker's shares have seen an increase of 8.81% over the last month, not keeping up with the Computer and Technology sector's gain of 9.41% and outstripping the S&P 500's gain of 6.42%.
Market participants will be closely following the financial results of HP in its upcoming release. In that report, analysts expect HP to post earnings of $0.71 per share. This would mark no growth from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $14.05 billion, reflecting a 6.26% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $2.84 per share and a revenue of $56.83 billion, demonstrating changes of -8.97% and +2.77%, respectively, from the preceding year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for HP. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
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. At present, HP boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, HP is holding a Forward P/E ratio of 7.01. This expresses a discount compared to the average Forward P/E of 14.17 of its industry.
Meanwhile, HPQ's PEG ratio is currently 5.52. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Computer - Micro Computers industry was having an average PEG ratio of 1.88.
The Computer - Micro Computers industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 34, finds itself in the top 14% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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).