Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D+ . The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, poor profit margins and generally high debt management risk.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 559.9% when compared to the same quarter one year ago, falling from $1,926.00 million to -$8,857.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, HEWLETT-PACKARD CO's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $2,846.00 million or 11.25% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, HEWLETT-PACKARD CO has marginally lower results.
- The gross profit margin for HEWLETT-PACKARD CO is currently lower than what is desirable, coming in at 26.30%. Regardless of HPQ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HPQ's net profit margin of -29.90% significantly underperformed when compared to the industry average.
- HPQ's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that HPQ's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.63 is low and demonstrates weak liquidity.
Hewlett-Packard Company and its subsidiaries provide products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Hewlett-Packard has a market cap of $29.1 billion and is part of the technology sector and computer hardware industry. The company has a P/E ratio of -5.3, below the S&P 500 P/E ratio of 17.7. Shares are down 43.8% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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