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HP (HPQ) Dips More Than Broader Markets: What You Should Know

HP (HPQ) closed at $28.40 in the latest trading session, marking a -0.7% move from the prior day. This change lagged the S&P 500's 0.07% loss on the day. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq lost 3.22%.

Heading into today, shares of the personal computer and printer maker had gained 6.88% over the past month, lagging the Computer and Technology sector's gain of 11.67% and outpacing the S&P 500's gain of 4.64% in that time.

HP will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.75, down 31.82% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $14.23 billion, down 16.45% from the prior-year quarter.

HPQ's full-year Zacks Consensus Estimates are calling for earnings of $3.33 per share and revenue of $57.2 billion. These results would represent year-over-year changes of -18.38% and -9.18%, respectively.

Any recent changes to analyst estimates for HP should also be noted by investors. These revisions help to show the ever-changing nature of 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.6% lower. HP is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, HP currently has a Forward P/E ratio of 8.6. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 8.6.

Also, we should mention that HPQ has a PEG ratio of 3.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Mini computers was holding an average PEG ratio of 2.48 at yesterday's closing price.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 25% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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