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Why Hewlett-Packard (HPQ) Is Up Today

Update (4:37 p.m. EST): Updated with closing price, day high and low prices, price change and volume information.

NEW YORK (TheStreet) -- Hewlett-Packard Co.  (HPQ) rose 2.6% to $28.85, up 73 cents from its previous close of $28.12, at the close of the trading on Tuesday as the tech sector was rising in the early part of the trading day. The NASDAQ Composite rose 1.69% to $4,183.02, up $69.71, on Tuesday.

The stock had a volume of 14,809,154, just below its average of 14,943,000. It hit a high of $28.85 and a low of $28.09 for the day.

The company also announced that it had helped Air France create a private cloud to automate the deployment of technology platforms in both physically and virtually. Air France, which manages more than 1,500 flights per day, has deployed the HP Cloud Service Automation software to increase the dependability of its 1,500 Linux servers and to speed up the deployment times for its physical and virtual platforms.

Air France recently went though a validation phase with HP Operations Orchestration and HP Server Automation software, which reduced the cost of its infrastructure provisioning by 85%. Air France then created a private cloud with the HP Cloud Service Automation software and put it into production. In just one year, the company has automated 90 percent of its installation processes.

TheStreet Ratings team rates HEWLETT-PACKARD CO as a Hold with a ratings score of C+. The team has this to say about its recommendation:

"We rate HEWLETT-PACKARD CO (HPQ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 120.91% and other important driving factors, this stock has surged by 74.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • HEWLETT-PACKARD CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HEWLETT-PACKARD CO turned its bottom line around by earning $2.62 versus -$6.45 in the prior year. This year, the market expects an improvement in earnings ($3.66 versus $2.62).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, HEWLETT-PACKARD CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for HEWLETT-PACKARD CO is currently lower than what is desirable, coming in at 25.74%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.85% significantly trails the industry average.
  • Net operating cash flow has decreased to $2,816.00 million or 30.62% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: HPQ Ratings Report

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