H-P Heading Towards Growth: Analyst

PALO ALTO, Calif. (TheStreet) -- Hewlett-Packard(HPQ) is gearing up for a good 2010 thanks to services, storage and networking, according to analyst firm Goldman Sachs.

The tech bellwether, which was one of the TheStreet's top tech picks for 2009, recently posted strong fourth-quarter results, and has forecast a return to growth next year.

Goldman is singing the company's praises after a recent meeting with H-P CEO Mark Hurd.

"There are multiple opportunities over the near and intermediate term to drive revenue growth and margin improvement, which we think will ultimately lead to a series of quarters with earnings upside," wrote analyst David Bailey, in a recent note. "On the top line, HP continues to expand its total available market, with the biggest opportunities coming from services, storage, and networking."

Networking is certainly looming large in H-P's future after its surprise $2.7 billion acquisition of 3Com(COMS). H-P is on a mission to challenge Cisco(CSCO) after the networking giant entered the server market earlier this year, and 3Com is also expected to open up new revenue in China.

There is a feeling, however, that it could be some time before H-P reaps the benefits of this strategy. Bailey says that the company's storage and networking initiatives may take several quarters to contribute significant revenue, although H-P's services business should fill this vacuum.

"An extremely strong quarter of services signings (many in accounts new to HP), and a building pipeline of new deals, suggest that the growth in HP's services business should pick up in the near term," he wrote. "In services, we think that HP has made significant progress in its outsourcing and maintenance businesses."