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HP (HPQ) Suffers a Larger Drop Than the General Market: Key Insights

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HP (HPQ - Free Report) closed the most recent trading day at $36.23, moving -0.63% from the previous trading session. This change lagged the S&P 500's daily loss of 0.05%. Meanwhile, the Dow lost 0.02%, and the Nasdaq, a tech-heavy index, added 0.18%.

Coming into today, shares of the personal computer and printer maker had gained 3.85% in the past month. In that same time, the Computer and Technology sector gained 3.5%, while the S&P 500 gained 2.76%.

Investors will be eagerly watching for the performance of HP in its upcoming earnings disclosure. In that report, analysts expect HP to post earnings of $0.93 per share. This would mark year-over-year growth of 3.33%. In the meantime, our current consensus estimate forecasts the revenue to be $13.96 billion, indicating a 1% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates project earnings of $3.39 per share and a revenue of $53.46 billion, demonstrating changes of +3.35% and -0.55%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for HP. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. HP is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, HP currently has a Forward P/E ratio of 10.77. For comparison, its industry has an average Forward P/E of 15.73, which means HP is trading at a discount to the group.

Investors should also note that HPQ has a PEG ratio of 2.66 right now. 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. The Computer - Micro Computers was holding an average PEG ratio of 1.82 at yesterday's closing price.

The Computer - Micro Computers industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 232, finds itself in the bottom 8% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the 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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