Hewlett Packard (HPQ) stock: what's the sentiment?

5:21 pm ET, 22 Aug 2018

HP Inc. (HPQ) shares are trading at 24.54, up 0.2%.  The company is set to report third-quarter results on August 23. What's driving HPQ stock price? What's HPQ stock price forecast?

HP delivered strong second-quarter revenue and earnings results. Personal Systems and Print continued their resurgence in the quarter, showing strength on both the top and bottom line. While 3-D printing and a managed print service focus will provide new growth opportunities for HP, secular headwinds in traditional printing will limit overall growth.

The second-quarter revenue increased 13% from the prior-year period to $14 billion. Personal systems maintained its strength from the first quarter as notebooks and desktops generated midteens sales growth, largely precipitated by Windows 10 refresh.  However, HP's adjusted operating margin contracted by 20 basis points year over year, stemming from the integration of the Samsung printing business and R&D investment.

What is the sentiment towards the HPQ stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative. 

Over the last month, HP Inc. (HPQ) returned +4.03%.

HP Inc. (HPQ) average analyst price target ($25.40) is 3.5% above its current price ($24.54).

For the latest price and information on HP Inc., please visit Finstead and search for "HPQ price" or "HPQ news".

HP Inc. (HPQ) Stock Guide

Updated at: 12:18 am ET, 18 Sep 2020

Before we start: if you're looking for HPQ stock price, you can quickly find it out by visiting Finny and typing "HPQ quote". If you're looking for a quick scoop on HPQ stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "HPQ". You'll get all this info in one place. Or you can just type "HPQ news" to get the latest stock news.

Looking to buy or sell HP Inc. (HPQ)? Interested in getting the full scoop on HPQ, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this HPQ stock guide, we'll address key questions about HPQ, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are HPQ earnings?
2. What is HPQ dividend?
3. What is HPQ dividend yield?
4. What is HPQ stock forecast (i.e., prediction)?
5. HPQ buy or sell? What is HPQ Finny Score?
6. What are the reasons to buy HPQ? Why should I buy HPQ stock?
7. What are the reasons to sell HPQ? Why should I sell HPQ stock?
8. What are HPQ key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are HPQ earnings?

HPQ trailing 12-month earnings per share (EPS) is $1.77.

2. What is HPQ dividend?

HPQ forward dividend is $0.70.

3. What is HPQ dividend yield?

HPQ forward dividend yield is 3.61%.

Analyst Predictions

4. What is HPQ stock forecast (i.e., prediction)?

Based on HPQ analyst price targets, HPQ stock forecast is $19.54 (for a year from now). That means the average analyst price target for HPQ stock is $19.54. The prediction is based on 18 analyst estimates.

The low price target for HPQ is $13.00, while the high price target is $25.00.

HPQ analyst rating is Buy.

Analysis

5. HPQ buy or sell? What is HPQ Finny Score?

#{finnyScore:70}Our quantitative analysis shows 7 reasons to buy and 3 reasons to sell HPQ, resulting in Finny Score of 70.

6. What are the reasons to buy HPQ? Why should I buy HPQ stock?

Here are the reasons to buy HPQ stock:

  • HP’s focus on high-end printers bodes well for the company’s profitability because these types of printers consume relatively larger quantities of high-margin supplies.
  • 3-D printing remains a promising growth area for HP.
  • HP’s acquisition of Samsung’s printing business should enhance HP’s reach in the Asia-Pacific region, which has been historically served by local competitors.
  • Product innovation and differentiations are the key drivers that have helped HP in maintaining its leading position in the technology sector. HP holds the leading position in PC market. The company is also one of the largest sellers of printers.
  • Since its split from Hewlett-Packard Company in November 2015, HP has been trying to stabilize declining sales and eroding profits through a series of restructuring initiatives. The company has been witnessing a secular decline in demand for PC and printers due to the ongoing shift toward tablets and smartphones — a space where it is yet to gain foothold. As part of its restructuring initiatives, the company has divested its content management software tools and Customer Communications Management (CCM) assets to Open Text Corporation, a move which will facilitate business realignment and allow it to focus on the PC and printing businesses.
  • It seems that the spin-off from Hewlett Packard Enterprise Company and restructuring initiatives such as focus on product innovations, pricing, marketing and sales activities, are apparently paying off at last. The Personal Systems segment generated revenues of $9.440 billion in first-quarter fiscal 2018, up 15% year over year. Notably, International Data Corporation, in its latest report on fourth-quarter 2017 PC shipment, stated that the quarter marked the seventh consecutive quarter of overall shipment growth for HP.
  • Giving a further boost to its declining Printing business, HP in 2017 announced that its all-new A3 multifunction printers (MFPs) will now be shipped globally to more than 80 countries covering all key markets. These printers are designed to disrupt the traditional $55 billion A3 copier category. HP's highly scalable and cost-optimized printers will meet the increasing demand of customers' printing needs.
  • HP’s strong liquidity position has helped it to return cash. The company had cash and cash equivalents of approximately $5.475 billion as of January 31, 2018 and generated cash flow of $996 million from operational activities during first-quarter fiscal 2018. The company paid $230 million as cash dividend and bought back shares worth $462 million during the quarter.
  • HPQ forward dividend yield is 3.61%, higher than the industry (0.32%) and sector (0.26%) forward dividend yields. See HPQ forward dividend chart.
  • HPQ forward P/E ratio is 8.09, which is low compared to its industry peers’ P/E ratios. See HPQ forward P/E ratio chart.
  • HPQ Price/Sales ratio is 0.48, which is low compared to its industry peers’ P/S ratios. See HPQ forward Price/Sales ratio chart.
  • HPQ PEG ratio (P/E adjusted for growth) is 0.97, which is low compared to its industry peers’ PEG ratios. See HPQ PEG chart.
  • HPQ average analyst rating is Buy. See HPQ analyst rating chart.
  • HPQ cash to debt ratio is 0.75, higher than the average industry (0.16) and sector (0.17) cash to debt ratio. See HPQ cash to debt chart.
  • HPQ Enterprise Value/Revenue multiple is 0.52, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See HPQ Enterprise Value/Revenue chart.

7. What are the reasons to sell HPQ? Why should I sell HPQ stock?

Let's look at the reasons to sell HPQ stock (i.e., the bear case):

  • The proliferation of mobile devices serves as a substitute for traditional PCs and printing, hindering HP’s growth potential in its core products.
  • Generic, low-cost PC manufacturers are aggressively pursuing growth, which will probably increase pricing pressure.
  • The increased digitization of documents and electronic workflow continues to eliminate paper in business processes, further reducing the need to print.
  • The company faces stiff competition for its PC and printer businesses. The PC segment competes with Lenovo, Dell Inc., Acer Inc., Apple Inc., Toshiba Corporation and Samsung Electronics Co., Ltd., while in the printing segment compete with the likes of Xerox Corporation and Seiko Epson Corporation.
  • HP has been serving the government vertical for a long time. The breadth of deals gives the leading PC vendor a wide exposure to this space. Though revenue streams from this sector are somewhat regular, the risks posed by low-margin businesses and federal budget cuts are high.
  • Around 65% of the company’s revenues come from businesses outside the United States. Thus, an economic condition which impacts the foreign currency exchange rates does result in transaction exposure, which leads to profit fluctuation. The stronger dollar had a significant negative impact on its results in the last quarter and the negative impact on its results could continue through the year.
  • HPQ stock price ($19.14) is close to the 52-week high ($19.91). Perhaps now is a good time to sell? See HPQ price chart.
  • HPQ quarterly revenue growth was -2.10%, lower than the industry and sector average revenue growth (0.32% and 0.89%, respectively). See HPQ revenue growth chart.
  • HPQ profitability is declining. The YoY profit margin change was -0.32 percentage points. See HPQ profitability chart.

Key Stats

8. What are HPQ key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for HPQ:

Metrics HPQ
Price $19.52
Average Price Target / Upside $20.04 / 2.69%
Average Analyst Rating Buy
Forward Dividend Yield 3.58%
Industry Computer Systems
Sector Technology
Number of Employees 55,000
Market Cap $26.78B
Forward P/E Ratio 8.30
Price/Book Ratio 0.47
Revenue (TTM) $56.79B
YoY Quarterly Revenue Growth -2.10%
Profit Margin 4.51%

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