HP (HPQ) Gains But Lags Market: What You Should Know

HP (HPQ) closed the most recent trading day at $35.06, moving +1.18% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.86%. Elsewhere, the Dow gained 1.98%, while the tech-heavy Nasdaq added 0.24%.

Prior to today's trading, shares of the personal computer and printer maker had lost 5.82% over the past month. This has was narrower than the Computer and Technology sector's loss of 13.4% and the S&P 500's loss of 12.37% in that time.

Wall Street will be looking for positivity from HP as it approaches its next earnings report date. This is expected to be May 31, 2022. In that report, analysts expect HP to post earnings of $1.06 per share. This would mark year-over-year growth of 13.98%. Meanwhile, our latest consensus estimate is calling for revenue of $16.1 billion, up 1.43% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.27 per share and revenue of $65.53 billion. These totals would mark changes of +12.66% and +3.22%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for HP. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. HP is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, HP is holding a Forward P/E ratio of 8.11. For comparison, its industry has an average Forward P/E of 15.31, which means HP is trading at a discount to the group.

Also, we should mention that HPQ has a PEG ratio of 2.03. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. HPQ's industry had an average PEG ratio of 1.92 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 247, putting it in the bottom 2% of all 250+ industries.

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

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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